Below are the numbers right of SS Website for me....so is this concerning based on the last statement? Based on earning a 117k a year? Retiring that wont happen. Does my wife get SS too or is it just one of us. I thought it was just one of us whoever gets the most?
At full retirement age (67):
$2,753 a month
At age 70:
$3,426 a month
At early retirement age (62):
$1,913 a month
Your estimates are based on the assumption that you will earn $117,000 a year from now until retirement.
Yes, you won't get that full amount if you stop working now. Social security is based on a formula that seems complicated, but really isn't, once you plug in your numbers. What's important is that it's based on the sum of 35 years of working, then divide by 35 (then by 12 to get monthly income), so any years that you don't have income will be 0 years, thus bringing down the average. BUT--it is also done on a sliding scale, so after a certain point, you only get 15% extra for each additional year, which doesn't increase your payout that much. So, for me, if I work to 45 (seems increasingly unlikely), which includes approximately 25 years of income, most of which is at the social security ceiling, I will receive $2,040 per month at age 67. If I work 6 more years to age 51 at the max social security limit (I think I estimated $117k), the pay out amount is $2,319 per month at age 67.
So, working 6 more years from 45 to 51 at maximum social security wages will net me an extra $280 per month, or $3,350 per year, starting at 67. Not chump change, but it's not going to motivate me to work 6 more years.
To calculate yours, add up all your social security annual earnings, divide by 35, then divide by 12 to get your average monthly income. If your average monthly income is over $4,624, the calculation is (.9)($767) + (.32)($4,624 - $767) + (.15)($AVERAGE MONTHLY INCOME - $4,624). If it's less than $4,624, then it's (.9)($767) + (.32)(AVERAGE MONTHLY INCOME - $767). You should double check that, but that's the formula I have in my notes when I looked at this last year.
The key point is that once you get your average monthly income over $4,624, you move into the 15% bracket, which doesn't give you much bang for the buck when it comes to hard working years versus zero years. It's something, but not a huge difference.
For your spouse, if she works, I believe she gets her amount based on her own calculations, with possibly some cap. She would also get benefits if you passed away. I'm not sure of those exact numbers, so check your statement and/or call SSA.
I point all this out because it was surprising to me how little social security actual increases after you hit a certain point, even with numerous zero years. You've probably hit that point. And while of course it's always possible for them to change or eliminate social security, I do not share the view here that you should treat it as zero. Social security is a major program that millions of poeple depend on; whatever changes they make will most likely occur gradually. So I think you should figure out your number if you don't earn another dollar, and factor that money into your analysis.
I haven't done the firecalc simulators or worried about every possible contigency, but with your social security factored in--and cheaper insurance!--you seem to be in excellent shape.
Good luck!