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Old 05-12-2015, 07:34 AM
 
Location: Retired
648 posts, read 497,637 times
Reputation: 1057

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I am 63.5 years old. Using the social security 'estimator' calculator I get the following benefit, assuming 0 earnings going forward (actually I am still working):

Age Benefit
63.5 years $2200
66 2638
67 2673
68 2885
69 3096
70 3483

The benefit increases at a 7.3% annual rate from 63.5 to 70 years old, not 8%. Note, there is only a 1.3% increase in the benefit going from age 66 to age 67!

There is a 12.5% benefit increase going from age 69 to age 70. So either the social security calculator has errors, or the 8% yearly increase is an inaccurate representation of the real situation. There seems to be a poor return in working past age 66, unless one goes all the way to 70.
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Old 05-12-2015, 07:39 AM
 
71,574 posts, read 71,730,589 times
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It is about 6% from 62 to fra and 8% from fra to 70.

but that is not a real return since it does not count a whole bunch of things like the checks you are giving up, spousal adders that can not be claimed without filing pre fra, lost gains on money spent down waiting as well as the fact medicare payments can increase beyond the cola amounts while delaying.

if you collect at 70 and live to 90 you are talking about a 4-5% real return possible but only if you make it to 90.
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Old 05-12-2015, 08:12 AM
 
Location: Cape Elizabeth
425 posts, read 387,365 times
Reputation: 745
Quote:
Originally Posted by Graywhiskers View Post
I am 63.5 years old. Using the social security 'estimator' calculator I get the following benefit, assuming 0 earnings going forward (actually I am still working):

Age Benefit
63.5 years $2200
66 2638
67 2673
68 2885
69 3096
70 3483

The benefit increases at a 7.3% annual rate from 63.5 to 70 years old, not 8%. Note, there is only a 1.3% increase in the benefit going from age 66 to age 67!

There is a 12.5% benefit increase going from age 69 to age 70. So either the social security calculator has errors, or the 8% yearly increase is an inaccurate representation of the real situation. There seems to be a poor return in working past age 66, unless one goes all the way to 70.
The reason you are not getting the 8% per year delayed retirement credit is because you started at age 63.5. You only are due delayed retirement credits by "delaying your retirement"! Past your FRA date!

So, if you go back and first start with your FRA and then put in age 70, you will see the 8% increases. But, not if you begin to collect at FRA.

I would assume the increases you are seeing are COLA's. Try this link: You can separately put in different retirement dates and use today's dollars, future dollars and also change the earnings.

Quick Calculator
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Old 05-12-2015, 08:39 AM
 
Location: Retired
648 posts, read 497,637 times
Reputation: 1057
Quote:
Originally Posted by ilovemycat View Post
The reason you are not getting the 8% per year delayed retirement credit is because you started at age 63.5. You only are due delayed retirement credits by "delaying your retirement"! Past your FRA date!

So, if you go back and first start with your FRA and then put in age 70, you will see the 8% increases. But, not if you begin to collect at FRA.

I would assume the increases you are seeing are COLA's. Try this link: You can separately put in different retirement dates and use today's dollars, future dollars and also change the earnings.

Quick Calculator

No,
they are not COLAs.

I understand from Mathjak that there is one rate of return to FRA, and a different one after FRA. However, that does not explain why the small increase from 66 to 67, and the large one from 69 to 70.

Retirement Estimator
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Old 05-12-2015, 08:49 AM
 
Location: NC Piedmont
3,911 posts, read 2,878,614 times
Reputation: 6291
Something to keep in mind is that the most likely outcome is a slight gain from living a little longer than break even. The second most likely outcome is a slight loss from not living to break even. The first scenario is only slightly more likely. Living way past for a big payoff is not very likely.

Last edited by ReachTheBeach; 05-12-2015 at 09:28 AM..
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Old 05-12-2015, 04:01 PM
 
Location: Cape Elizabeth
425 posts, read 387,365 times
Reputation: 745
Quote:
Originally Posted by Graywhiskers View Post
No,
they are not COLAs.

I understand from Mathjak that there is one rate of return to FRA, and a different one after FRA. However, that does not explain why the small increase from 66 to 67, and the large one from 69 to 70.

Retirement Estimator
Unfortunately, I am unable to access the calculator you are using on ssa.gov. I do not have 40 quarters (I didn't pay into SS) so I can't see and interpret the results you are getting.

However, go back and pay close attention to the wording of the results. If it says, for example, "if you retire at 63.5 you will receive $2200.00, and then it says "at 64 it will become --- (or be), and at 65 it will become ---, then it is not applying delayed retirement credits.

If, instead it says, "if you retire at 63.5 you will receive $2200.00, but if you wait until 64 or 65 or 66 etc. then the figures after your FRA age should increase from the FRA amount by 8%.

The weird increases (large and small) are either a glitch in the software, or perhaps you transposed a number from 69 to 70. If you want, you can copy and paste the wording here and maybe I will see something that can help further explain what is going on.
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Old 05-12-2015, 06:11 PM
 
Location: Retired
648 posts, read 497,637 times
Reputation: 1057
Quote:
Originally Posted by ilovemycat View Post
Unfortunately, I am unable to access the calculator you are using on ssa.gov. I do not have 40 quarters (I didn't pay into SS) so I can't see and interpret the results you are getting.

However, go back and pay close attention to the wording of the results. If it says, for example, "if you retire at 63.5 you will receive $2200.00, and then it says "at 64 it will become --- (or be), and at 65 it will become ---, then it is not applying delayed retirement credits.

If, instead it says, "if you retire at 63.5 you will receive $2200.00, but if you wait until 64 or 65 or 66 etc. then the figures after your FRA age should increase from the FRA amount by 8%.

The weird increases (large and small) are either a glitch in the software, or perhaps you transposed a number from 69 to 70. If you want, you can copy and paste the wording here and maybe I will see something that can help further explain what is going on.
Hi,
I have run this calculator numerous times and shown it to other people. I have not transposed numbers. Here is the first output:

If you start your benefits: And you earn an average of: Your benefit will be about:
At full retirement (age 66) $0 a year (from now until full retirement) $2,638 a month
At age 70 $0 a year (from now until age 70) $3,483 a month
At your current age $0 a year $2,199 a month

Sorry for the formatting changes, but they were copy and pasted. Next I will do the same but add ages 67 and 69.

If you start your benefits: And you earn an average of: Your benefit will be about:
At age 69 $0 a year (from now until age 69) $3,096 a month
At age 67 $0 a year(from now until age 67) $2,673 a month

There is only a small change in going from age 66 to 67, but this is made up for with a large change in going from age 69 to 70. Therefore, my choice will be to take social security at age 66, if these numbers are accurate.

Thank-you for looking at this!
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Old 05-12-2015, 08:13 PM
 
Location: Cape Elizabeth
425 posts, read 387,365 times
Reputation: 745
Quote:
Originally Posted by Graywhiskers View Post
Hi,
I have run this calculator numerous times and shown it to other people. I have not transposed numbers. Here is the first output:

If you start your benefits: And you earn an average of: Your benefit will be about:
At full retirement (age 66) $0 a year (from now until full retirement) $2,638 a month
At age 70 $0 a year (from now until age 70) $3,483 a month
At your current age $0 a year $2,199 a month

Sorry for the formatting changes, but they were copy and pasted. Next I will do the same but add ages 67 and 69.

If you start your benefits: And you earn an average of: Your benefit will be about:
At age 69 $0 a year (from now until age 69) $3,096 a month
At age 67 $0 a year(from now until age 67) $2,673 a month

There is only a small change in going from age 66 to 67, but this is made up for with a large change in going from age 69 to 70. Therefore, my choice will be to take social security at age 66, if these numbers are accurate.

Thank-you for looking at this!
Ok, What sticks out to me first and foremost is the phrase "and you earn an average of "0" from now until full retirement".

Now, in your first post you said you entered zero, even though you are actually working. If you truly want a real estimate you need to at least use what you earned in 2014 or think you will earn in 2015 for the estimate. The estimates SSA sends people always assume that they will earn at least, if not a little more in the year you are in and going forward.

So, when a zero shows up, the estimate begins to go down. In a way, you have to compare yourself to a made up person- a person with the same exact earnings as you and same year of birth, but then that person kept working and you stopped. The way you did it, it assumes a zero for 2015, 2016, 2017, 2018. Also, was 2014 showing up on your earnings record? If not, that is another zero.

The form also states this: We do not use earnings in the year you begin receiving benefits.

Now, for you, I think you are born in December? Is that right? So, any year you plug in, it is not using that year's earnings (even if you were entering them). What happens is that in January, they do a recomputation of your benefit and put in the year before's earnings and your benefit amount effective January has the prior years earnings in it.

For now, I would re-run the estimate with earnings- and only stop your earnings when you think you might stop working and see what happens.

If you are still getting weird percents, this is a link to "contact us" with your calculator question: Benefit Calculators.
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Old 05-12-2015, 08:17 PM
 
Location: NC Piedmont
3,911 posts, read 2,878,614 times
Reputation: 6291
What is your break even date? It is usually late 70s. The SSA calculator doesn't show it. What I was getting at earlier is it is purely a roll of the dice as to whether you actually get more total $ or not. If you delay, you get more each month but you miss all those early payments. Where you catch up is generally in the late 70s unless you were able to invest the money at a decent return; in that case you will have to live into your 80s to truly pass break even. The best time to start taking it is when you need it IMO.
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Old 05-12-2015, 09:25 PM
 
2,429 posts, read 3,224,402 times
Reputation: 3330
Quote:
What is your break even date? It is usually late 70s......The best time to start taking it is when you need it IMO.

OK so THe OP has figured out the "return" or "growth" or "increase" you get by waiting.
S/he has used the calculator to see what the benefit will be at various ages....
If one needs the money earlier, take the benefit..... if you don't...... wait. OR start early and bank/invest it.
It's not that difficult a decision is it?
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