Have I been misunderstanding SS early retirement benefits??

[teen persuasion]

Mar 29, 2023 15:16:28 GMT -5 haapai said:

Mar 28, 2023 21:50:24 GMT -5 teen persuasion said:

Open Social Security that pulmonarymd mentioned, for anyone who wants to compare different SS claiming strategies. You need to know your PIA at FRA.

Danger! Danger, Will Robinson! 

If you spent a good portion of your working years not working, or not earning much, you really should examine how the Social Security Administration estimates your PIA. 

I'm 54, but I really dinked around earning-wise in my twenties and thirties.  In order to actually get the PIA that is calculated by Social Security, I will have to continue working until my FRA of 67 and continue earning what I am earning now (adjusted for inflation).  If I do not replace those low-earning years (again, adjusted for inflation) with what I am earning now (adjusted for inflation), it will really hurt. 

Simply plugging in my projected PIA at FRA might give me some extremely poor guidance. 

Yes, good point that SSA assumes you keep working until SS claiming age.  There's a way to input your own estimated future earnings (or zero if you retire early).  IIRC it's AnyPIA.

I have a bunch of zero years while I was SAHM, and none of my college years earnings count   because I was employed as a student by the college (not WS, but they still didn't contribute to FICA).  So I will never be eligible for more than 1/2 DH's PIA.  I've been figuring out how much he's eligible for based only on his earnings to that point, ignoring future earnings.  Once he hit 35 years, any future years would only displace lower wage-adjusted years - so each new year only adds a tiny bit (.32 * difference / 35) as he's past the first bend point.

[haapai]

Mar 30, 2023 20:32:09 GMT -5 teen persuasion said:

Mar 29, 2023 15:16:28 GMT -5 haapai said:

Danger! Danger, Will Robinson! 

If you spent a good portion of your working years not working, or not earning much, you really should examine how the Social Security Administration estimates your PIA. 

I'm 54, but I really dinked around earning-wise in my twenties and thirties.  In order to actually get the PIA that is calculated by Social Security, I will have to continue working until my FRA of 67 and continue earning what I am earning now (adjusted for inflation).  If I do not replace those low-earning years (again, adjusted for inflation) with what I am earning now (adjusted for inflation), it will really hurt. 

Simply plugging in my projected PIA at FRA might give me some extremely poor guidance. 

Yes, good point that SSA assumes you keep working until SS claiming age.  There's a way to input your own estimated future earnings (or zero if you retire early).  IIRC it's AnyPIA.

I have a bunch of zero years while I was SAHM, and none of my college years earnings count   because I was employed as a student by the college (not WS, but they still didn't contribute to FICA).  So I will never be eligible for more than 1/2 DH's PIA.  I've been figuring out how much he's eligible for based only on his earnings to that point, ignoring future earnings.  Once he hit 35 years, any future years would only displace lower wage-adjusted years - so each new year only adds a tiny bit (.32 * difference / 35) as he's past the first bend point.

That might be true in your husband's case but not in mine.  I really dinked around in the eighties and nineties.  I have a spreadsheet that shows how much replacing each low-income year will improve my AIME and a square right next to it showing how much that will improve my PIA.  The amounts don't look tiny to me, even though I am past the first bend point.  (This happens when you are replacing a low, inflation-adjusted earnings year with an amount that is four times as large.)

If you haven't claimed yet, and are still working, you can probably build a similar spreadsheet for yourself.  I'm sure that it's even more exciting when you are replacing zeros.  It could also be pretty handy for estimating what your AIME and PIA will be at a particular date.

It can also help you pinpoint when additional earnings years stop helping you nearly as much.  My spreadsheet shows me that the next five years are pretty crucial. 

[Rukh O'Rorke]

Mar 31, 2023 12:04:25 GMT -5 haapai said:

Mar 30, 2023 20:32:09 GMT -5 teen persuasion said:

Yes, good point that SSA assumes you keep working until SS claiming age.  There's a way to input your own estimated future earnings (or zero if you retire early).  IIRC it's AnyPIA.

I have a bunch of zero years while I was SAHM, and none of my college years earnings count   because I was employed as a student by the college (not WS, but they still didn't contribute to FICA).  So I will never be eligible for more than 1/2 DH's PIA.  I've been figuring out how much he's eligible for based only on his earnings to that point, ignoring future earnings.  Once he hit 35 years, any future years would only displace lower wage-adjusted years - so each new year only adds a tiny bit (.32 * difference / 35) as he's past the first bend point.

That might be true in your husband's case but not in mine.  I really dinked around in the eighties and nineties.  I have a spreadsheet that shows how much replacing each low-income year will improve my AIME and a square right next to it showing how much that will improve my PIA.  The amounts don't look tiny to me, even though I am past the first bend point.  (This happens when you are replacing a low, inflation-adjusted earnings year with an amount that is four times as large.)

If you haven't claimed yet, and are still working, you can probably build a similar spreadsheet for yourself.  I'm sure that it's even more exciting when you are replacing zeros.  It could also be pretty handy for estimating what your AIME and PIA will be at a particular date.

It can also help you pinpoint when additional earnings years stop helping you nearly as much.  My spreadsheet shows me that the next five years are pretty crucial. 

Me too! (ETA: dinked in 80's and 90's for earnings...)

I have an excel with my SS earnings, and the inflation adjusted amount. I have 8 years that are <10k after the inflation adjustment! Similar to teen persuasion I had many years with university TA and RA work as my main source of income.

After those 8 years, I have 5 years >10k <20K and 3 that are >20k <30K.


So 16 really low earning years. ******

However!!


When the social security statement gives the payout at each age, they are already assuming you have worked up to that age and earned similar to your last year on record to that age. So they have already removed those lower years - unless you are over your FRA? 

I'm not sure what their expectation is for the estimates at 68, 69, 70. Is it that you quit earning but are delaying benefits?



ETA
******I already have 5 of these super low earning years replaced with higher income years.

[Rukh O'Rorke]

Nope!

Based on my social security statement - the estimated payments beyond FRA assum you are working and earning at the same level up until that age.

ETA: well that was based on a comparison of the projected payment at 68 to the projected payment at 69, which was more than 8% increase.

but looking at the projected payment at 67 (my FRA) to that at 68, it is only a 3.3% increase - suppose to be 8% just for the delay - forget about additional wages and a high earning year replacing a low one!

Now I have no clue what is up!

[Rukh O'Rorke]

I pulled my ss statement again - still the same. it must be an error. Looking at the project monthly payout each year given expected earning at the same level as your last year's earnings the YOY increase is between 8.2% to 14%, except for the year between 67 and 68 which is 3.3%.

How can I ask them to look into this as a potential error?

[teen persuasion]

There's something about SSA stops indexing at age 60, I think, two years before you'd first be eligible at 62. Not sure if that's part of what's going on, or not.