Those Social Security benefit online calculators

Like this one:

Social Security Quick Calculator

I’m curious if they’re accurate.

This one, for instance, has no place to enter any employment gaps. My husband, at age 67, is working now, but he has had gaps in his career of a year here, a year there.

The above calculator delivers an estimated monthly benefit for him, but I don’t know if we can rely on that. I’ve had no gaps since about 1981, so I feel more secure in its estimate of my monthly benefit.

The Retirement Estimator, also from SSA, actually accesses your records which can help accuracy with those gaps.

That’s the one I used when figuring out when to start taking SS. It may not be absolutely accurate, but it’s real close.

I used this calculator and was surprised that it estimated “full retirement” (age 66) and another figure for retiring at age 70.

I thought “full retirement” means you hit the ceiling for monthly benefits. Obviously not.

So, do you max out at age 70?

(NOT that I’m going to be working beyond 70 :))

At age 70 you max out at the percentage of your income that is used to calculate your benefit, and yes, it is higher than if you start drawing benefits at 66. If you wait to draw benefits and continue to work past 70 your benefit can be higher, I believe, if your annual income continues to increase, but I’m not positive about that part since I was never interested in doing it.

“Full retirement” means you are not starting to draw your benefits early, as SSA figures it, and the actual age for full retirement can change depending on when you were born. For people retiring soon it’s 66, for people retiring a number of years in the future it will be higher, I suppose 67 or 68, I haven’t looked it up. Anyway, it’s not so much about when you stop working as when you start drawing SS benefits. You can draw at any age 62 or older, but the amount of your benefit will be smaller the earlier you start drawing.

If you delay taking benefits after “full” retirement age they work the benefits you deferred back in up until the age of 70. After full retirement, they add the delayed retirement credit if you still aren’t collecting. Full retirement is a bit of a misnomer. :smiley:

ISTR lifetime total benefits work out about the same, assuming you die when expected, between minimum age and full retirement. I’m not sure if the same applies to delayed retirement.

When I ran the numbers for myself, the total payouts all intersected at about age 81. By that I mean if I got $100 per month at age 62, $110/mo. at 63, $120/mo. at 64, etc., when I got to age 81, I’d end up collecting the same amount of money for all those years from SS.

Since I fully expect to live past age 81 and didn’t really need the money at the time, it made more sense to me to delay taking SS so I will get a larger monthly payment for the rest of my life. My wife (and my sister, as well) went the other way and took the lower, but earlier payout.

BUT NOTE that before you reach “full retirement” age, there are limits on how much you can earn without reducing your SS benefits.

How does it impact your benefit if you collect SSDI disability?

The calculation itself isn’t hard. My understanding is it goes like this.

Find your SS taxed income for the top 35 years you worked. Then get the average of all those 35 years (if you have less than 35 years, those years count as 0).

Then divide by 12 to get your average indexed monthly earnings. For a normal person this number is probably around $4000 or so in AIME. The average person may have made $4000 a month (inflation adjusted) for their top 35 income producing years, so their SS payments are based on that.

The SS payments are based on a 90-32-15 system, where for the first ~$900 or so in AIME you get 90% back in SS payments. Then 32% back until you hit about $5400/month, then about 15% back from $5400-$10000 a month. Those are rough figures. This is to make sure low earners don’t go broke and because high earners do not need the money as much. Most people only his the 90 and 32 marks.

So if you earned 6000 a month, you get 90% of the first $900 (so $810), then 32% of 900-5400, so 1440. Then 15% of 5400-6000. So 90. 810+1440+90 = 2340 as your monthly SS payment.

Then you have when you retire. You can retire as early as 62 or as late as 70. At 62 you get 75% of full retirement benefits. 100% at full retirement age (65-67 depending on when you were born). At 70 you get 132%. Over the course of your life, your total payments are about the same. But if you think you’ll live past your early 80s (if you expect to live to 95 because you have great genetics) then get it at 70. If you expect to be dead before your early/mid 80s, better to take it early.

I’ve found some calculators which propose more interesting scenarios. Since my wife’s payout at 70 is less than half of mine at 66, I am now on her spousal benefits (started after I hit 66) and when I git 70 we will switch to my full benefits and her going on my spousal benefits. You can’t do that if you are born after 1954 or so (not sure of the exaxt age.)
My calculator was from Bedrock Capital Management, but they seem to have vanished.
There are lots of loopholes those born early enough can use, most have been closed.

Here’s a weird sidebar: This prompted me to try to use the better estimator (I’ve done it in the past).

When signing in, the page had my user ID and password saved.

I clicked to log in.

And was IMMEDIATELY greeted with “We suspended electronic access to your personal information. We tried three times to match the information you provided with our records, but were unable to do so. You may try to access the electronic information again after 24 hours. Please verify your personal information again before trying to use this online service.”

That’s a bit disturbing, to be greeted with that the very first try (versus, say, getting a message that I’d sent the wrong passwords and please try again).

Identity theft???