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How To Get Your Social Security Estimate

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Earn Ssa Work Credits In Some Countries

Social Security Update! | How To Estimate Your New Monthly SSI Payment for 2022

You may not have enough credits from your work in the United States to qualify for retirement benefits. But, you may be able to count your work credits from another country. The SSA has agreements with 24 countries. If you earned credits in one of those countries, they can help you qualify for U.S. benefits.

The Impact Of Early Retirement On Calculated Social Security Benefits

Its crucial to recognize that the standard Social Security statement projects benefits assuming continued work, as it means that not working as late as full retirement age can reduce prospective benefits. Not because future benefits are actually reduced by stopping work early . But simply because projected statements assume continued work by default, such that its absence will still result in a lower actual benefit in the future than what was previously projected.

However, the actual impact on Social Security benefits of stopping work before full retirement age varies heavily, depending on what the prospective retiree had already earned in benefits or more specifically, what additional years of work would have done to that individuals highest-35-years earnings history.

Use The Ssas Online Benefits Calculator

The SSA provides a variety of calculators to help you plan for all of the unique situations that come with retirement. Each of these calculators is connected to the mySocialSecurity website, SSA.gov. When you establish login credentials for mySocialSecurity, all the information related to your Social Security deductions and benefits is easily accessible online. You can even get the same statements online that you can request from your local field office.

When you use the calculators on this website, youll receive accurate estimates based on the number of credits you have and the amount of money youve contributed towards Social Security. One calculator allows you to estimate your monthly retirement benefits at different retirement ages. If you dont want to create a mySocialSecurity account, you can use the sites Quick Calculator, but the results are less specific.

Because these estimates are based on your contributions from Social Security payroll deductions, the SSAs online benefits calculators are some of the most effective ways to estimate your retirement benefits. The highly variable factors in the calculations involve annual cost of living adjustments based on inflation and laws that could change before your retirement date.

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When You Choose To Start Taking Social Security Benefits

The yearand even the month within that yearthat you choose to begin taking Social Security benefits affects how much you receive each month. You can start claiming Social Security benefits early as age 62, the current early retirement age. But you wont get your full PIA. Itll be reduced based on how many months you have until your full retirement age. This reduction can really add up, topping in at as high as 30% for particularly early claimers.

You can avoid these surcharges on your PIA, of course, simply by waiting to start payments until your full retirement age. This is generally between ages 66 and 67, depending on when you were born.

You can even add onto your base amount by delaying when you start benefits. After you reach full retirement age, you can boost your benefits by up to 8% of your PIA annually simply by not claiming Social Security. These benefit increases are known as delayed retirement credits, and you can accrue them up to age 70.

An important note: These benefit rate changes are performed to provide roughly the same cumulative benefit over a lifetime, assuming a roughly average lifespan. In other words, if you start Social Security earlier, youll probably claim it for longer someone with the same lifespan who delayed payments would claim them for less time. To provide them the same total benefit, earlier payments must be smaller and later benefits have to be larger to catch up.

When Will You Collect

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The SSA calculates your benefit amount at your full retirement age . This depends on the year you were born. FRA by birth year is:

  • 19431954: age 66
  • 1955: age 66 and two months
  • 1956: age 66 and four months
  • 1957: age 66 and six months
  • 1958: age 66 and eight months
  • 1959: age 66 and 10 months
  • 1960 and later: age 67

The monthly amount you are eligible to receive at your FRA is considered your full benefit, but it is not your minimum or maximum benefit.

You have the option to file for early retirement as early as age 62. But, you may choose to delay taking your benefits until as late as age 70.

There are many reasons why you might choose to take early retirement or to delay it. That choice has a direct impact on the amount of your monthly payment. If you opt for early retirement, you are choosing a lower monthly payment for the rest of your life. By choosing to delay your benefit to any age between your FRA and age 70, you lock in an increase.

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How To Calculate Social Security Benefits

If youd just like a ballpark estimate of your benefit, the Social Security Administration offers a quick calculator to give you a sense of your potential benefit. This calculator simply asks for your current annual salary, your birth date and your projected retirement date, although it does allow you to fill in your actual income by year to get a more accurate estimate.

This estimate does not take early or late application for benefits, taxes and Medicare, or COLA increases into account. Youll likely need to download the Social Security Administrations full calculator software or work with a financial advisor to determine your full benefits considering those factors.

Knowing how much you can expect to receive in Social Security gives you an important piece of your retirement income puzzle. With that in hand, you can make the financial plans you need for a secure and fulfilling retirement.

There Are A Few Tools You Can Use To Calculate Your Social Security Benefits Including Signing Up For A My Social Security Account

The best way to estimate your Social Security benefits is to sign up for a my Social Security account. The Social Security Administration used to mail benefit statements every five years to workers between the ages of 25 and 60 and then annually until they started taking benefits. But since 2011, the agency has cut back on mailing statements. It now only sends paper statements to workers who are at least 60 years old and have not yet signed up for a my Social Security account. The statements are sent about three months before your birthday.

For those who have an account, you will receive an email about three months before your birthday reminding you to review your online statement.

The benefit estimate provided in the statement is based on your past earnings and a projection of your future income, which assumes your income will remain at the same level as the previous year until you retire. You could get more than the estimate if you end up earning more in the future or less if your income drops. The statement provides an estimate if you continue working until age 62, your full retirement age and age 70.

The statement also includes an estimate for survivor benefits for your family and what you would receive each month if you became disabled and started taking disability benefits.

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Fact #: Social Security Benefits Are Modest

Social Security benefits are much more modest than many people realize the average Social Security retirement benefit in June 2020 was about $1,514 a month, or about $18,170 a year. For someone who worked all of their adult life at average earnings and retires at age 65 in 2020, Social Security benefits replace about 40 percent of past earnings. This replacement rate will slip to about 35 percent for a medium earner retiring at 65 in the future, chiefly because the full retirement age, which has already risen to 66, and is gradually climbing to 67 over the 2017-2022 period.

The average Social Security retirement benefit in June 2020 was $1,514 a month, or about $18,170 a year.

Moreover, most retirees enroll in Medicares Supplementary Medical Insurance and have Part B premiums deducted from their Social Security checks. As health care costs continue to outpace general inflation, those premiums will take a bigger bite out of their checks.

Social Security benefits are modest by international standards, too. The United States ranks just outside the bottom third of developed countries in the percentage of an average workers earnings replaced by the public pension system.

Social Security lifted 1.5 million children out of poverty in 2018, as the chart shows.

When Will I Receive My Social Security Check

How To Estimate Your NEW Social Security, SSI, SSDI Monthly Benefits Amounts for 2022

The Social Security Administration’s payment calendar helps recipients plan for payments. If you were born in the first 10 days of your birth month, then you receive payments by the second Wednesday of the month. Those born on the 11-20 receive payments by the third Wednesday. Those born on the 21-31 receive payments by the fourth Wednesday. However, those who began receiving payments before May 1997 receive payments by the third day of each month.

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How Can I Get A Social Security Statement That Shows A Record Of My Earnings And An Estimate Of My Future Benefits

You can get your personal Social Security Statement online by using your mySocial Security account. If you dont yet have an account, you can easily create one. Your online Statement gives you secure and convenient access to your earnings records. It also shows estimates for retirement, disability and survivors benefits you and your family may be eligible for. To set up or use your account to get your online Social Security Statement, go to . We also mail paper Statements to workers age 60 and older three months before their birthday if they dont receive Social Security benefits and dont yet have a mySocial Security account. Workers who dont want to wait for their scheduled mailing can request their Social Security Statement by following these instructions. The Statement will arrive by mail in four to six weeks.

Important Information:

When To Apply For Benefits How Much Youll Get

AARP, Updated April 19, 2021

All the information presented is for educational and resource purposes only. It is not intended to provide specific or investment advice. We don’t guarantee the accuracy of the tool and suggest that you consult with your advisor regarding your individual situation.

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How To Workaround An Inaccurate Social Security Benefits Estimate For Planning Purposes

Lets look at an example case to see how badly your SocialSecurity benefits estimate can skew your planning if you work with inaccuratenumbers and the simple adjustment you can make to get a more accurateprojection.

Jeremy got his first job in 1996 atthe age of 22. His starting pay was $40,000 per year and every year since, he earneda 3% raise. This gives him a 2019 salary of $78,943.When the SSA estimates his future benefits, they assume that the prior yearssalary will continue until his retirement at either age 62, 67 or 70.

So how does this affect theestimate?

To figure this out we can use the SocialSecurity Online Calculator . If we plug inJeremys earnings and use the todays dollars option, it gives him a benefitat age 67 of $2,452 per month. If you simplychange that to future dollars it changes the benefit at age 67 to$5,464 per month thats a $3,012 per month jump in benefits!

Which is why I offer this quickword of warning: dont use the inflation methodoption here to estimate your future benefit. Its too high. The assumptions they use are 4% or higher for future wageswhich will be applied to both your earnings andthe benefits formula.

Instead, you need to get under thehood and figure out for yourself how to calculate your benefit. I promise:its not that hard. For a step-by-step video,check out my guide on How To CalculateSocial Security Benefits

How To Estimate Social Security Retirement Benefits

Some Social Security estimates were wrong: What you need to know

Retirement brings a lot of exciting life changes. In addition to much more free time than youre probably used to, youll have ample opportunities to pursue hobbies, volunteer or travel the world like youve always dreamed of doing. But in addition to these new possibilities, retiring can also bring changes to your finances. You wont be earning income in the same way, and this can make creating and sticking to a budget an even more important reality.

Part of successfully budgeting involves knowing how much money youll have available to spend and part of knowing how much youll be bringing in during retirement involves understanding your Social Security payment amounts. There are three methods of estimating how much money youll receive in Social Security benefits each month after retiring. While these processes wont give you exact amounts, youll end up with ballpark figures that help you draft a workable retirement budget. Heres how you can get started estimating.

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Calculate Your Average Indexed Monthly Earnings

Once you have your inflation-adjusted 35 years, youll divide that amount by 420. Thats the number of months in a 35-year period, so it gives you a monthly inflation-adjusted amount. That amount will be rounded down to the nearest lower dollar amount. If you retired today, that would be the amount the SSA would use to determine your monthly Social Security benefit.

If you were taking retirement in 2021, SSA would take your inflation-adjusted, indexed wages for every year prior to 2019. Any wages you earned after 2019 wouldnt be indexed. Assuming those two years were among your 35 highest-earning years, the amount would be added to your total before being divided by 420.

Determine Whether You Qualify For A Retirement Benefit

Social Security benefits are based on credits, and you start earning credits the first day you fill out a piece of employment paperwork. Your employer submits a portion of each paycheck to the federal government on your behalf, and part of this tax payment goes toward your future Social Security benefits, attached to your SSN.

But you dont have to work for a business to earn credits toward retirement. If you work as an independent contractor or earn any other type of taxable income, you report that to the IRS. Contractors pay self-employment tax, which funds both their Social Security and Medicare.

To qualify for Social Security, you need at least 40 credits, which equals about 10 years of work. Those years dont have to be consecutive. They accumulate throughout your life, counting toward benefits regardless of when they were earned.

You wont be able to start collecting your Social Security payout until youre at least 62 years of age, but that will be a reduced amount. You can collect 100% of your benefits at your full retirement age, which is determined by your birth year. If you wait until after your full retirement age to collect benefits, you can earn delayed retirement credits which boost your monthly income.

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How Do You Calculate Your Social Security Taxes

“Social Security taxes” can refer to taxes paid into the Social Security system or taxes paid on Social Security benefits. The taxes that fund Social Security come from the payroll tax, which is 6.2% for employees or 12.4% for self-employed individuals.

When you’re receiving Social Security benefits, you’ll still have to pay income taxes, but you won’t owe taxes on all of your benefits. Those whose total annual income tops $34,000 will pay income tax on 85% of their Social Security benefits. Otherwise, they will pay income tax on 50% of their Social Security benefits.

How To Stop Social Security Check Payments

You should regularly check the estimated Social Security benefit youâll eventually get

The SSA can not pay benefits for the month of a recipients death. That means if the person died in July, the check received in August must be returned. Find out how to return a check to the SSA.

If the payment is by direct deposit, notify the financial institution as soon as possible so it can return any payments received after death. For more about the requirement to return benefits for the month of a beneficiarys death, see the top of page 11 of this SSA publication.

Family members may be eligible for Social Security survivors benefits when a person getting benefits dies. Visit the SSA’s Survivors Benefits page to learn more.

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How Inflation Impacts Your Pia

Your PIA is calculated at age 62. If you wait beyond age 62, cost-of-living adjustments will be applied to your PIA for each year afterward.

If you have already had most of your 35 years of earnings, and you are near age 62 today, the age 70 benefit amount you see on your Social Security statement will likely be higher due to these cos- of-living adjustments. Many people do not account for this when doing their own calculations, which can lead them to think that taking Social Security early is a better deal, when waiting is often the better deal.

In the table below, our hypothetical worker, born in 1954, is eligible for full retirement at age 66. The column on the right shows the effect of inflation for waiting beyond age 62 to take their benefits.

Effect of Age on Claiming Benefits
Year

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