why did my projected SS payment go up? UPdate!

[tallguy]

Jan 19, 2020 13:43:50 GMT -5 Rukh O'Rorke said:

Jan 19, 2020 13:14:53 GMT -5 tallguy said:

Shouldn't be.  Even if it were, the amount would not be quite that high.  COLA was 1.6% so you could compare the projections from last year to this and see what the increase was.  Benefit projections are expressed in current dollar terms to enable a comparison with those already receiving benefits.  I'd guess (and it is just a guess) it was an updating of the indexing numbers in conjunction with your income history. 

hmmmm - $54 didn't strike me as a lot - but it's around a 3% increase on my retire at 62 scenario. 


2.874%
- retire at 67
2.734%
- retire at 70
3.123%
- retire at 62

I think it's got to be related to my increased income, a 3% increase. I exceed the max income for ss taxes in 2019 - could that have trigger it, even though they don't list the income?

I wouldn't think that SSA has your 2019 income figures incorporated into your projection yet.  I'm still guessing it was the indexing, and I think haapai may have it right.  If it were me I would check back later and see if the projection changes again when it does show your 2019 income. 

[Deleted]

So, I got curious and tried to check mine, but after ONE mistake logging in they locked my account for 24 hours.  So, I guess I'll try again tomorrow...

[haapai]

Jan 19, 2020 14:01:02 GMT -5 Rukh O'Rorke said:

Jan 19, 2020 13:18:50 GMT -5 haapai said:

I think that it is much more likely to be the timing of when they apply indexing.  That is, the SSA hadn't applied indexing to your 2018 income by April 2018 and that they had applied it sometime before January 2020.  It's only 1.0362 but since it also applies to all of the years between 2018 and your projected retirement ages, it can have quite an effect. 

That might be the difference then.

I guess at some point, the 2019 income will be in there and I can see if there are further changes. Seem like a footnote would be in order if amounts change within the same reporting year? But I'm not seeing anything.

Thanks so much for sharing your in-depth knowledge, haapai - it's all a black box to me!

There is no reason to thank me.  Tallguy said pretty much the same thing at pretty much the same time.  Plus almost everything that I know about social security projections comes from chasing a trail of breadcrumbs that started with this article

[tallguy]

For people with questions about Social Security and how things work, this is a good site.  There is a large bank of questions from readers and answers from experts. 

[Rukh O'Rorke]

Jan 19, 2020 14:06:56 GMT -5 minnesotapaintlady said:

So, I got curious and tried to check mine, but after ONE mistake logging in they locked my account for 24 hours.  So, I guess I'll try again tomorrow...

oh no! Hope you can get in and do see an increase too! It's always nice to have a little bit more

And I think this was your top earning year? So hopefully two increases.....

Do you check the projected benefit amount every year like I do?

[teen persuasion]

I'd think it has to be the wage index increasing and the new chart being applied between your last check-in and now.

I know one year I was calculating it by hand, and was curious how much DH's future SS benefit would increase (I was not adding any future years, just actual earned income to date). I was surprised how much it increased due to the new wage index chart, vs adding one more year of income.

Once you get past 35 years, and you are replacing low income years with higher current ones, you only gain the difference between the high and the (wage adjusted) lower income, divided by 420, times .32 if you are past the first bend point (or times .15 if past the second bend point).

Made up example: old low income year $10k, wage adjustment factor for that year 3.0, so adjusted value is $30k. New income replacing it is $72k. You've effectively added only $42k to your 35 years total. Divide that by 420 (35 years * 12 months), resulting in 100. Multiply by .32, for a monthly increase of $32 (past the first bend point), or by .15 for a monthly increase of $15 if you are past the second bend point. These increases are at FRA, probably age 67 for most of us not yet collecting. Lower at age 62, bit higher at 70.

The increasing wage index chart can have a bigger influence on your future benefit calculation, because it's increasing ALL of your past income amounts, to keep up with current wage inflation. All 35 years were tweaked upward a bit, for a larger total. The bend points get adjusted upward, too, each year. The rate applied below the first bend point is 90% - so a slightly larger chunk gets the highest rate. You likely filled this level years ago, but the top of this level rises over time, if you KWIM.

[Deleted]

Jan 19, 2020 14:41:38 GMT -5 Rukh O'Rorke said:

Jan 19, 2020 14:06:56 GMT -5 minnesotapaintlady said:

So, I got curious and tried to check mine, but after ONE mistake logging in they locked my account for 24 hours.  So, I guess I'll try again tomorrow...

oh no! Hope you can get in and do see an increase too! It's always nice to have a little bit more

And I think this was your top earning year? So hopefully two increases.....

Do you check the projected benefit amount every year like I do?

I do, but I can't say that I pay attention to the dollar amount very closely.  I could dig through my files to see if I have any printed copies of old ones, but I appear to only have a saved PDF of last year's for some reason.  I think I was cleaning files a while back and figured I only needed the most current.

So, finally got in.  There is now a line for 2019 earnings, but listed as "Not recorded yet". 

Statement from April 2019 has $1688 for FRA and Jan 2020 has $1729, so like a 2.4% increase.  

I only have 30 years of income listed and 10 of them are really small (like 5-12K), so hopefully this next decade bumps it up some. 

[Rukh O'Rorke]

Jan 20, 2020 12:46:09 GMT -5 minnesotapaintlady said:

Jan 19, 2020 14:41:38 GMT -5 Rukh O'Rorke said:

oh no! Hope you can get in and do see an increase too! It's always nice to have a little bit more

And I think this was your top earning year? So hopefully two increases.....

Do you check the projected benefit amount every year like I do?

I do, but I can't say that I pay attention to the dollar amount very closely.  I could dig through my files to see if I have any printed copies of old ones, but I appear to only have a saved PDF of last year's for some reason.  I think I was cleaning files a while back and figured I only needed the most current.

So, finally got in.  There is now a line for 2019 earnings, but listed as "Not recorded yet". 

Statement from April 2019 has $1688 for FRA and Jan 2020 has $1729, so like a 2.4% increase.  

I only have 30 years of income listed and 10 of them are really small (like 5-12K), so hopefully this next decade bumps it up some. 

Thanks for the confirmation!!

We can see if the income from 2019 takes it up higher

I think that they cook your current income as a level until the retirement age into the configurations. I've had mine go down when my health insurance premium moved into pretax and my ss income decreased. But as your income will hopefully go up through the decade - then the payments should as well.

As i mentioned earlier - I hope that they are that sophisticated, and I see real uptics as i replace low income years with higher income years - but I suspect that the previous income level is already factored in, so only the difference between this year and last will result in an increase.

[Rukh O'Rorke]

Jan 19, 2020 15:45:41 GMT -5 teen persuasion said:

I'd think it has to be the wage index increasing and the new chart being applied between your last check-in and now.

I know one year I was calculating it by hand, and was curious how much DH's future SS benefit would increase (I was not adding any future years, just actual earned income to date). I was surprised how much it increased due to the new wage index chart, vs adding one more year of income.

Once you get past 35 years, and you are replacing low income years with higher current ones, you only gain the difference between the high and the (wage adjusted) lower income, divided by 420, times .32 if you are past the first bend point (or times .15 if past the second bend point).

Made up example: old low income year $10k, wage adjustment factor for that year 3.0, so adjusted value is $30k. New income replacing it is $72k. You've effectively added only $42k to your 35 years total. Divide that by 420 (35 years * 12 months), resulting in 100. Multiply by .32, for a monthly increase of $32 (past the first bend point), or by .15 for a monthly increase of $15 if you are past the second bend point. These increases are at FRA, probably age 67 for most of us not yet collecting. Lower at age 62, bit higher at 70.

The increasing wage index chart can have a bigger influence on your future benefit calculation, because it's increasing ALL of your past income amounts, to keep up with current wage inflation. All 35 years were tweaked upward a bit, for a larger total. The bend points get adjusted upward, too, each year. The rate applied below the first bend point is 90% - so a slightly larger chunk gets the highest rate. You likely filled this level years ago, but the top of this level rises over time, if you KWIM.

not really - but this is starting to make a little more sense to me.

Can you explain what the first and second bend points are?

[tallguy]

This should help.

PIA formula

[Deleted]

Jan 20, 2020 13:27:19 GMT -5 Rukh O'Rorke said:

Thanks for the confirmation!!

We can see if the income from 2019 takes it up higher

I think that they cook your current income as a level until the retirement age into the configurations. I've had mine go down when my health insurance premium moved into pretax and my ss income decreased. But as your income will hopefully go up through the decade - then the payments should as well.

As i mentioned earlier - I hope that they are that sophisticated, and I see real uptics as i replace low income years with higher income years - but I suspect that the previous income level is already factored in, so only the difference between this year and last will result in an increase.

Ah.  Yes, I guess I knew there was the "this is assuming you keep making what you're making" statement, but it never really registered.  So yeah.  Guess that's it for me!

[Rukh O'Rorke]

Jan 20, 2020 13:39:25 GMT -5 tallguy said:

This should help.

PIA formula

Thanks - I think I've got it.

Found this in same general area...

Latest index

The national average wage index for 2018 is 52,145.80. The index is 3.62 percent higher than the index for 2017.

thinking this might be the answer to my original question..and something suggested earlier on in the thread.

[Rukh O'Rorke]

well - I got my final statement and after the 2019 statement adjustment, my new benefit amount is only a modest increase based on increased salary. 

From the 2019 adjustment to 2020, my benefit at 62 only went up $23/month. Super disappointing! Relative to previous salary retirement at 70 the benefit only increased $87/month.

I do know that as you earn more your ss benefit is proportionally smaller, but with these amounts assuming even income until said retirement, I feel like they are only going to go down in reality. 

Was hoping this would cheer me up a bit with the 401k balances in freefall. But not very good news at all, and I am extremely doubtful that I am going to be able to maintain this level of income in future.

So - well - there ya go!

[sesfw]

Sorry Rukh .......... It's like that for a lot of us.

[countrygirl2]

My SS payment went up, never fear the insurance premiums raised enough to eat it up.

[Tiny]

Wouldn't it be better to look at the yearly amount you might be getting?

I found this online for 2020 Maximum from SS:

The maximum monthly Social Security benefit that an individual can receive per month in 2020 is $3,790 for someone who files at age 70. For someone at full retirement age, the maximum amount is $3,011, and for someone aged 62, the maximum amount is $2,265.

Maybe focusing on how whatever SS you will get fits into your plan rather than the small amount it increased this year is a better over all plan?

My no where near the maximum monthly amount of SS will cover my most basic monthly budgeted expenses at 62 (I'm 56 now... so I know my future guesstimate expenses isn't perfect but it's not a total Wild Ass Guess).

[countrygirl2]

Hubs nets $2880 grosses $3024 as part B is now $144 plus change that automatically comes out.  He worked till age 69, but SS was not deducted from his salary for 13 years or so. His company did not take it out for overseas workers.  Some of the guys worked overseas 25 years or more, he said many had a lot of savings but their SS is going to be low. Now many may have lost a lot of their savings.  So his was based on his 30 highest years, to bad they didn't pay in, he would have maxed out. I had to quit work early so my 30 years or so of working I get a pittance. 

Better save extra and have another source of income too as this is not enough to live on, or not for us. Sure we could on less but we tried to save enough that our standard of living wouldn't drop to much.  Also keep in mind we pay close to $900 a month insurance premiums, maybe more now, haven't figured it up this year.

[Rukh O'Rorke]

Not sure how to respond to last few comments.

This thread was only about my ss, not anything else.

[countrygirl2]

Just saying what hubs got and didn't contribute for 15 years. Your income must be staying about even I'm guessing? I sure wish we had had those 15 years added to his, it would have maxed. But he still made enough for it to be decent. I hope yours is too. How many more years do you have left to work?