Question about social security calculations on ssa.gov

[Padonak]

I just checked My Social Security web site (ssa.gov) and it looks like they updated their SS benefit calculator and made more useful for early retirees because you can now enter expected future earnings (or enter 0 if already retired).

I couldn't find the answer on the web site so I'm asking here: is the amount the calculator shows you on the web site in today's dollars or future dollars? For example, it it shows that you'll get $2K/month if you wait until the full retirement age of 67 but you are now in your 40s, does it mean you'll be paid much more than $2K in future dollars (which is the equivalent of $2K in today's dollars)?

[terran]

It matches my calculations for today's dollars, which makes sense given that the bend points they use are all indexed to the current year. Keep in mind that the calculations assume you continue to earn what you put for future earnings until you start collecting (maybe stopping at 67 if you delay until after that), so if you put any more than $0 then it will assume you keep working from now until then.

It's not too hard to make a spreadsheet to do the calculation so you can change expected earnings every year, so I explain how to that if you want.

[secondcor521]

It's today's dollars.  So you'll be paid more than $2K in actual future dollars which will have <insert big hand wave about inflation adjusted calculations far in the future> the spending power of $2K today.

[Padonak]

Thanks, that's what I thought too, it's today's dollars, just wanted to confirm.

How accurate do you think their calculator is if you use 0 dollars as future earnings? I know there are spreadsheets and even software that can be used for more detailed SS forecasts but if the website is accurate enough I'd rather just use that. The numbers would be the worst case scenario assuming 0 earnings.

[maizefolk]

Thanks, that's what I thought too, it's today's dollars, just wanted to confirm.

How accurate do you think their calculator is if you use 0 dollars as future earnings? I know there are spreadsheets and even software that can be used for more detailed SS forecasts but if the website is accurate enough I'd rather just use that. The numbers would be the worst case scenario assuming 0 earnings.

I'd say they'd be accurate enough not to worry about. The ways they could be wrong are things that won't be captured in a more detailed spreadsheet either: social security cuts the size of checks when the trust fund runs out, the inflator used to calculate the present value of your past earnings ends up not capturing your own personal rate of inflation, you end up deciding to take social security earlier or later than your full retirement age.

[rab-bit]

Thanks, that's what I thought too, it's today's dollars, just wanted to confirm.

How accurate do you think their calculator is if you use 0 dollars as future earnings? I know there are spreadsheets and even software that can be used for more detailed SS forecasts but if the website is accurate enough I'd rather just use that. The numbers would be the worst case scenario assuming 0 earnings.

I think that their calculator is accurate with $0 future earnings. I made my own spreadsheet to compute it and it matches their calculator to within a couple of dollars.

[secondcor521]

Thanks, that's what I thought too, it's today's dollars, just wanted to confirm.

How accurate do you think their calculator is if you use 0 dollars as future earnings? I know there are spreadsheets and even software that can be used for more detailed SS forecasts but if the website is accurate enough I'd rather just use that. The numbers would be the worst case scenario assuming 0 earnings.

I'd say they'd be accurate enough not to worry about. The ways they could be wrong are things that won't be captured in a more detailed spreadsheet either: social security cuts the size of checks when the trust fund runs out, the inflator used to calculate the present value of your past earnings ends up not capturing your own personal rate of inflation, you end up deciding to take social security earlier or later than your full retirement age.

+1

FWIW, I've been FIRED for about 5 years now and my SS estimate has stayed the same or gone up a few bucks the past five years.  But I'm 18 years away from starting, so I won't know until then if it's actually accurate or not.

I do haircut my SS benefit estimate by 40% to account for the commonly discussed funding and political risk issues, but that's a separate discussion from the estimate itself.