Anyone else shocked by the increase in their Social Security benefits?

[Gronnie]

I haven't checked my social security statement in ages - but this thread made me look and I noticed something new.

I have about 10 really low earning years when I was a teen and in college that now seem to be grouped into 2 years of full time minimum wage income - effectively taking me down from almost 30 years of work to 19 years. I swear this is new.

I remember when I looked several years ago that I had lots of 3-7k years from high school and undergrad. Now I have 1991-2000 and 2000-2005 and then annual wages from 2006 onwards.

I wonder if that is just how they list it or how they count it? And if it is how they count it, will just wash out or will it hurt me because now I'll have more zero years when I cut the cord?

This doesn't hurt you in any way and in fact could actually help you if you ended up having more than 35 years and didn't have to replace some of your earnings.

[Sandi_k]

@FIRE 20/20 - I explicitly noted that the values were several years old. The post was to illustrate how the bend points work.

I'm sorry, my post wasn't intended as a correction but an update to provide the current values.  You were definitely clear that they were a few years old, I was just trying to provide the new values and a reference for both when your values were correct and for anyone who wanted to find the updated values in the future.  I can see that what I wrote could have been interpreted as a correction, but that wasn't my intent.  I apologize that it came across that way.

All good! ;)

[StarBright]

I haven't checked my social security statement in ages - but this thread made me look and I noticed something new.

I have about 10 really low earning years when I was a teen and in college that now seem to be grouped into 2 years of full time minimum wage income - effectively taking me down from almost 30 years of work to 19 years. I swear this is new.

I remember when I looked several years ago that I had lots of 3-7k years from high school and undergrad. Now I have 1991-2000 and 2000-2005 and then annual wages from 2006 onwards.

I wonder if that is just how they list it or how they count it? And if it is how they count it, will just wash out or will it hurt me because now I'll have more zero years when I cut the cord?

This doesn't hurt you in any way and in fact could actually help you if you ended up having more than 35 years and didn't have to replace some of your earnings.

I'm really hoping to bow out in the next year or so - hence my concern of 20 years of work instead of 29. Really hoping to not work another 15! I started drawing a paycheck when I was 13, I'm ready to be done for a bit.

[Zamboni]

I kind of wish they wouldn't send these statements out to people. I understand that SSA is working to be transparent, but there are unintended consequences.

In the case of my parents and some of their friends, what sounded like a lot of money for retirement 20-30 years ago turns out to barely feel like anything now. Unfortunately some people use "but I'll just take my social security" as an excuse to save less . . . or save nothing . . . and then they are surprised when they can't comfortably retire.

[EscapeVelocity2020]

I kind of wish they wouldn't send these statements out to people. I understand that SSA is working to be transparent, but there are unintended consequences.

In the case of my parents and some of their friends, what sounded like a lot of money for retirement 20-30 years ago turns out to barely feel like anything now. Unfortunately some people use "but I'll just take my social security" as an excuse to save less . . . or save nothing . . . and then they are surprised when they can't comfortably retire.

Yup.  I have the 'rich parents, poor parents' example.  My parents didn't factor SS in, optimized the payout, and use SS income as fun money;  DW's parents claimed early and palpably wait for the SS check every month...

[JupiterGreen]

I kind of wish they wouldn't send these statements out to people. I understand that SSA is working to be transparent, but there are unintended consequences.

In the case of my parents and some of their friends, what sounded like a lot of money for retirement 20-30 years ago turns out to barely feel like anything now. Unfortunately some people use "but I'll just take my social security" as an excuse to save less . . . or save nothing . . . and then they are surprised when they can't comfortably retire.

Yup.  I have the 'rich parents, poor parents' example.  My parents didn't factor SS in, optimized the payout, and use SS income as fun money;  DW's parents claimed early and palpably wait for the SS check every month...

Did the "poor parents" save for retirement at all outside SS, or was it the taking it early that more substantially impacted their retirement?

[MaybeBabyMustache]

I kind of wish they wouldn't send these statements out to people. I understand that SSA is working to be transparent, but there are unintended consequences.

In the case of my parents and some of their friends, what sounded like a lot of money for retirement 20-30 years ago turns out to barely feel like anything now. Unfortunately some people use "but I'll just take my social security" as an excuse to save less . . . or save nothing . . . and then they are surprised when they can't comfortably retire.

But, the goal of the statements is to make sure people understand what they will get. Some people might interpret it as "a lot" of money, and some may think it's a drop in the bucket of their overall retirement plan. But, data is a valuable tool for everyone. Unfortunately, not everyone is financially responsible, regardless of how much access to information they have.

[brandon1827]

The statement says that SS is only meant to replace approximately 40% of your pre-retirement income. I would hope that there aren't many people just not worrying about retirement at all and thinking SS is going to fully fund whatever plans they have after they're done working.

[Zamboni]

^Look at the big brain on brandon reading all the words! Lol

I just look quickly at the numbers that follow $ signs (like most people.)

And many people must neglect to figure in the bite that taxes will take if they have other income while collecting Soc Sec.

Here's another 40%: 2 out of 5 retirees rely on social security for more than half of their income.

1 out of 8 rely on it for >90% of their income.

Although ~90% of people retiring in the next couple of decades will end up financially ahead and collect more money overall if they wait until age 70 to start drawing Soc Sec, only 6% will wait.
Based upon current trends, nearly 70% of people who do not have a disability will start drawing at age 65 or younger, with about half of those starting to collect at the earliest possible moment at 62.

It turns out that most people can't resist having what they perceive as an uncollected check waved in front of their face month after month, year after year.

[EscapeVelocity2020]

I kind of wish they wouldn't send these statements out to people. I understand that SSA is working to be transparent, but there are unintended consequences.

In the case of my parents and some of their friends, what sounded like a lot of money for retirement 20-30 years ago turns out to barely feel like anything now. Unfortunately some people use "but I'll just take my social security" as an excuse to save less . . . or save nothing . . . and then they are surprised when they can't comfortably retire.

Yup.  I have the 'rich parents, poor parents' example.  My parents didn't factor SS in, optimized the payout, and use SS income as fun money;  DW's parents claimed early and palpably wait for the SS check every month...

Did the "poor parents" save for retirement at all outside SS, or was it the taking it early that more substantially impacted their retirement?

Not really something I have discussed with the in-laws.  They have a lot tied up in their retirement home and they had a feast or famine income in heavy machine sales, which petered out on a long famine...