Social Security future benefits statement question

[teller80]

When I see my future benefits statement, it says something like:

If you retire at age 62 your monthly benefit is $1000.

If you retire at age 67, your monthly benefit is $1500

If you retire at age 70, your monthly benefit is $2000

(These numbers are entirely made up)

My question is - are those amounts in TODAY's dollars? I mean $1500 now isn't going to be worth $1500 in fifteen years. I'm guessing it would be so I can decide what buying power I have, but can someone confirm? Thanks!

 

[Alexle2007]

When I see my future benefits statement, it says something like:

If you retire at age 62 your monthly benefit is $1000.

If you retire at age 67, your monthly benefit is $1500

If you retire at age 70, your monthly benefit is $2000

(These numbers are entirely made up)

My question is - are those amounts in TODAY's dollars? I mean $1500 now isn't going to be worth $1500 in fifteen years. I'm guessing it would be so I can decide what buying power I have, but can someone confirm? Thanks!

The paper statement is in today’s dollars. If you go onto the SSA website they have an online calculator that you can change it to calculate in future dollars- https://www.ssa.gov/planners/retire/AnypiaApplet.html.

 

[teller80]

The paper statement is in today’s dollars. If you go onto the SSA website they have an online calculator that you can change it to calculate in future dollars- https://www.ssa.gov/planners/retire/AnypiaApplet.html.

Thank you. I did not know about the future dollars calculator.

 

[North of Mouse]

They would love for you to postpone receiving SS, but do you know how long it would take to just break even on the extra per month?? Much better to take it at 62, then work the max. you can (and not lose benefit) until Medicare can kick in.

 

[Dakota731]

Does it mean if you continue making what you earn now you will get those amounts at those ages? Or are those amounts based on what you’ve already earned? I find the phrasing confusing on my statement.

 

[Judique]

Does it mean if you continue making what you earn now you will get those amounts at those ages? Or are those amounts based on what you’ve already earned? I find the phrasing confusing on my statement.

It is confusing. The numbers are based on what you are earning now or have earned to present. As you keep earning, as you get older and as your income rises, the numbers adjust upward. I am in the process of receiving my social security as I've just retired. I know what I will receive, based on my current age and SS earnings statements and by what the website tells me.

And, taking SS at 62 is not necessarily going to be possible if you continue to work your regular job. I would have had to pay it all back if I had taken it due to the amount of my salary.

You can go on the SS website and create an account at any time and there is a lot of information there. It will give you a better understanding of the benefit and help you put all the pieces together.

 

[teller80]

They would love for you to postpone receiving SS, but do you know how long it would take to just break even on the extra per month?? Much better to take it at 62, then work the max. you can (and not lose benefit) until Medicare can kick in.

That's one of the questions we've been kicking around lately, that is until the stock market fell the last few days. Both my and my husbands parents passed away between ages of 59-64, so longevity may not be in our cards. But if we do live to be 90, the extra money will be helpful.

 

[QueenIsabella]

They would love for you to postpone receiving SS, but do you know how long it would take to just break even on the extra per month?? Much better to take it at 62, then work the max. you can (and not lose benefit) until Medicare can kick in.

If you're bored, go over to bogleheads.com. There are many spirited discussions about the "best" time to take Social Security. I'm more in the "take the money and run" camp--start early, even if you don't need the money, before the government reneges on their promises. But, if you have a family history of longevity and don't need the money, you might want to wait. We're fortunate in that DH loves his job and has no interest in quitting before age 65. OTOH, his brother hates his job and will be retiring early (this year, at age 58, in fact).

 

[piccolopat]

One thing about early retirement (not early SS) is that it will likely lower your eventual SS benefits. They base your benefit on the highest 35 years of income. I'll retire this year at 60 and know I'll have two years of zero income before I can even think of taking SS. However I've planned for this and want to leave my 5 hour a day commute and pursue other interests.

 

[tvguy]

One thing about early retirement (not early SS) is that it will likely lower your eventual SS benefits. They base your benefit on the highest 35 years of income. I'll retire this year at 60 and know I'll have two years of zero income before I can even think of taking SS. However I've planned for this and want to leave my 5 hour a day commute and pursue other interests.

It should have zero impact on your benefits. I am, however assuming that you already have 35 years paying into Social Security. THOSE highest earning years will be the average

You're 35 years of highest earnings are still there assuming you have been working and paying into Social Security 35 years as of today. Now, you could earn more in benefits if the salary you WOULD have earned in the 2 years you are not working was higher than the years in the previous 35 years. But it is very unlikely to reduce your benefits and if it did, it would be very small, like $20 a month..

 

[NinaBella]

These conversations are interesting. DH is 57 so we need to start looking at the future SS benefits. A lot of his co-workers are also discussing retirement plans. I just told him to check with his co-workers who say they are retiring at 62 and moving the a retirement community in Florida if they know if DoD Civil Service can even "double dip" meaning can DH work -and- draw SS? That might be why some of his co-workers are planning to punch out at 62, because they may not be allowed to double dip. This would be different for someone working at a private company and drawing SS since that is not a double dip situation. I am sure my dad knows, but he is overseas, so I will ask him next time he calls. He has been talking about SS a lot anyways but in regard to having a minor child and SS and geting 50% more in his check because of my sister who will be under 18 when he starts taking SS.

 

[TwoMisfits]

If you reach 65, your life expectancy will average 84 years old...knowing this, I'd rarely encourage anyone who hasn't already had a major health issue to take their SS before they reach "full benefits" age (which is 66 now and growing to 67 eventually)...

 

[Alexle2007]

These conversations are interesting. DH is 57 so we need to start looking at the future SS benefits. A lot of his co-workers are also discussing retirement plans. I just told him to check with his co-workers who say they are retiring at 62 and moving the a retirement community in Florida if they know if DoD Civil Service can even "double dip" meaning can DH work -and- draw SS? That might be why some of his co-workers are planning to punch out at 62, because they may not be allowed to double dip. This would be different for someone working at a private company and drawing SS since that is not a double dip situation. I am sure my dad knows, but he is overseas, so I will ask him next time he calls. He has been talking about SS a lot anyways but in regard to having a minor child and SS and geting 50% more in his check because of my sister who will be under 18 when he starts taking SS.

Is your husband under the new federal retirement system, FERS? My DH is 52 and a federal employee and is looking forward to retirement in the next 4 years when he is eligible. Under the current system, he can retire and receive an offset until he can begin collecting SS. If he receives the offset, he is not eligible for to work during that period between retiring and collecting SS. Once he begins collecting SS, the work offset rules apply. https://faq.ssa.gov/link/portal/340...k-and-get-Social-Security-retirement-benefits

 

[North of Mouse]

That's one of the questions we've been kicking around lately, that is until the stock market fell the last few days. Both my and my husbands parents passed away between ages of 59-64, so longevity may not be in our cards. But if we do live to be 90, the extra money will be helpful.

Well, a lot in life is a gamble, in a way. None of us know our life expectancy, even thinking about our parent's ages at (natural) death. So, in that respect, each of us has to follow our 'gut instinct' so to speak!

Dh & I did the pencil scrunching and have no regrets. We were/are not dependent on SS, but it sure makes life easier. We added up the extra for the amount of years til receiving full benefits, then added up what we would receive/have received for that period. It would take a loooong time to even 'break even'. Have no regrets for sure (hind site to a degree, I know, but wasn't different with fore site either).

These conversations are interesting. DH is 57 so we need to start looking at the future SS benefits. A lot of his co-workers are also discussing retirement plans. I just told him to check with his co-workers who say they are retiring at 62 and moving the a retirement community in Florida if they know if DoD Civil Service can even "double dip" meaning can DH work -and- draw SS? That might be why some of his co-workers are planning to punch out at 62, because they may not be allowed to double dip. This would be different for someone working at a private company and drawing SS since that is not a double dip situation. I am sure my dad knows, but he is overseas, so I will ask him next time he calls. He has been talking about SS a lot anyways but in regard to having a minor child and SS and geting 50% more in his check because of my sister who will be under 18 when he starts taking SS.

Not sure I understand exactly what you are saying, but, it's true, if you are not ready to retire at early SS benefit age, you cannot double dip. You are allowed to make X amt. only, before you will start getting a deduction in your SS benefit per month. Dh was able to retire earlier than that as he was already receiving his company's retirement benefits (I realize, no more of that). He retired 5 years before, and was working for said company as a contractor, so therefore could double dip with them. Not so with SS.

So, again, if I understand what you mean, No, your dh's co-workers CANNOT double dip with SS working for a private company (except, as said, a limited amt).

 

[NinaBella]

So, again, if I understand what you mean, No, your dh's co-workers CANNOT double dip with SS working for a private company (except, as said, a limited amt).

They do not work for a private company. They work for the Department of Defense (Civil Service). So I am wondering even if they are 65, 67, etc. if they are actively employed by the DoD, if they can draw SS. Double-Dip meaning getting two incomes both from the government. I know you can get your retirement pension and SS, but I am curious about those still actively working for the DoD.

I am going to have DH ask his co-workers that seem to have everything already figured out.

 

[North of Mouse]

If you reach 65, your life expectancy will average 84 years old...knowing this, I'd rarely encourage anyone who hasn't already had a major health issue to take their SS before they reach "full benefits" age (which is 66 now and growing to 67 eventually)...

Respect your opinion, but definitely disagree. Have you run the numbers to see when waiting for full benefits would outweigh getting them earlier? I realize some people would rather work (especially until 65 when Medicare benefits start - we had retirement med. through company) and in that case could rationalize it a little better.

As for the 'extra' at a later age, not sure it would make a lot of difference as cost of long term care would eat that in no time (without ins. for that). But, each one has to weigh the pros and cons (for them).

 

[TwoMisfits]

Respect your opinion, but definitely disagree. Have you run the numbers to see when waiting for full benefits would outweigh getting them earlier? I realize some people would rather work (especially until 65 when Medicare benefits start - we had retirement med. through company) and in that case could rationalize it a little better.

As for the 'extra' at a later age, not sure it would make a lot of difference as cost of long term care would eat that in no time (without ins. for that). But, each one has to weigh the pros and cons (for them).

https://www.schwab.com/resource-center/insights/content/when-should-you-take-social-security

If you wait til 66, you "win" by 78 over a 62 year old...and every year after...if you are a women (who lives to over 86), that's 8 years of losing out...

Now, less incentive to wait til 70, b/c that break even is around average life expectancy...but waiting til it kicks in fully is almost always the right call unless you can't, you're sick, or you had a dual income family and can "split" when you each take it...

 

[North of Mouse]

https://www.schwab.com/resource-center/insights/content/when-should-you-take-social-security

If you wait til 66, you "win" by 79 over a 62 year old...and every year after...if you are a women (who lives to over 86), that's 7 years of losing out...

Now, less incentive to wait til 70, b/c that break even if around average life expectancy...but waiting til it kicks in fully is almost always the right call unless you can't, you're sick, or you had a dual income family and can "split" when you each take it...

From what I see by that chart, our 'break even' ages would be between 80 - 83 years of age - which to me is ridiculous - that's a long time to wait for the supposedly (who knows by then) extra amt. It would probably not be of much benefit to us by then. We'll enjoy it now!! As I said, it's a choice we all have to make for ourselves - the government would love for us to delay!! Now, if we all knew we'd have a quality of life til 95!!

 

[TwoMisfits]

From what I see by that chart, our 'break even' ages would be between 80 - 83 years of age - which to me is ridiculous - that's a long time to wait for the supposedly (who knows by then) extra amt. It would probably not be of much benefit to us by then. We'll enjoy it now!! As I said, it's a choice we all have to make for ourselves - the government would love for us to delay!! Now, if we all knew we'd have a quality of life til 95!!

You are looking at the difference between waiting from 62 vs 70 (wrong line)...pretty much everyone breaks even by 78 by waiting 4 years from 62 to 66...you can use the simple chart to see that...

 

[DVCcurious]

Best advice for most people: You should work as long as possible and then take Social Security as soon as you retire. For most people that means working until 70 and then taking SS and retiring.

Why do I say that? Medical advancements means people are living longer than ever. 20 years ago the odds of a 65 year old in average health living to 100 were X, today the odds are much larger than X (I don’t feel like looking it up but you get the point).

If the point of all this (saving in a 401k, the social security system) is to provide a minimum acceptable standard of living during old age then my advice is best.

Delaying SS and working/investing until 70 will provide more income at age 88 than if that same person retired and took SS at an earlier age, that is a mathematical fact.

Is your goal “to maximize the present value of SS I receive over my life” or is your goal “to maximize my income at age 88 under the worst-case scenario”?