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Old 01-08-2016, 07:51 AM
 
Location: Forests of Maine
30,692 posts, read 49,476,475 times
Reputation: 19136

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My Social Security account projections seem to be changing even when I have not contributed any additional funds into my account.

A few years ago, I logged onto the SSA website. Then they began sending me a reminder to go look at my account. Last year I got a reminder from them to look at my account, I did, and I made notes of what the numbers were. This morning in my email was another reminder to go look at my SS account. There are some changes, which I find interesting.

I am retired military. My pension does not pay into SS. Since I retired, most years my income as reported to SS has been '0'. A couple years have had minor incomes from contract work.

Here are the changes that I have noticed.

My early [age 62] benefit has increased by $28/month [from 2015 data to the 2016 data], to a current projected benefit of $794.

My 66 year, 10 month benefit has increased by $39/month [from 2015 to 2016], to a current projected benefit of $1,114.

My 70 year benefit has increased by $48/month [from 2015 to 2016], to a current projected benefit of $1,396.

At first you would think, that since I have not been contributing any further into my SS account, that the benefit amounts would remain the same.

But as another year goes by and '0' was added to my account I find it interesting that my projected benefits would continue to increase from the 2015 report to the 2016 report.
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Old 01-08-2016, 10:27 AM
 
Location: Florida
4,373 posts, read 3,708,767 times
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Are you under age 62? I assume you are. I think until you are 62 your wages are indexed for inflation and this increase your benefit.

I think the idea is that if you earned 100 in 1990 it can not buy what it did in 2015 due to inflation. Thus SS adjusts the 100 to what it would buy in 2015 and then calculates your benefit.


With all the zero years any work you would do now would replace a zero year and increase your benefit, but since you are not working this can not be the reason.
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Old 01-08-2016, 11:00 AM
 
Location: OH>IL>CO>CT
5,238 posts, read 8,417,308 times
Reputation: 7191
Default Earnings Indexing

Quote:
Originally Posted by rjm1cc View Post
Are you under age 62? I assume you are. I think until you are 62 your wages are indexed for inflation and this increase your benefit.

I think the idea is that if you earned 100 in 1990 it can not buy what it did in 2015 due to inflation. Thus SS adjusts the 100 to what it would buy in 2015 and then calculates your benefit.


With all the zero years any work you would do now would replace a zero year and increase your benefit, but since you are not working this can not be the reason.
Basically correct. See https://www.socialsecurity.gov/oact/...wifactors.html where it says:

"An individual's earnings are always indexed to the average wage level two years prior to the year of first eligibility."
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Old 01-08-2016, 11:15 AM
 
Location: Forests of Maine
30,692 posts, read 49,476,475 times
Reputation: 19136
Quote:
Originally Posted by rjm1cc View Post
Are you under age 62? I assume you are. I think until you are 62 your wages are indexed for inflation and this increase your benefit.

I think the idea is that if you earned 100 in 1990 it can not buy what it did in 2015 due to inflation. Thus SS adjusts the 100 to what it would buy in 2015 and then calculates your benefit.


With all the zero years any work you would do now would replace a zero year and increase your benefit, but since you are not working this can not be the reason.
Yes, I am 56 and I have been on pension since 2001.

If my previous wages get re-indexed each year, then would I be correct to assume the re-indexing would continue every year until I chose to begin taking SS?

As an organic farmer; I breed pigs and poultry; I produce honey, maple and a selection of veggies and herbs. I file income taxes every year. My farm income is usually off-set by farm expenses.

I do not really plan on taking SS benefits at 62, if I do not need this additional income stream. I may as well wait until I am 70.
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Old 01-08-2016, 11:18 AM
 
Location: Ohio
19,938 posts, read 14,249,679 times
Reputation: 16116
Quote:
Originally Posted by reed303 View Post
Basically correct. See https://www.socialsecurity.gov/oact/...wifactors.html where it says:

"An individual's earnings are always indexed to the average wage level two years prior to the year of first eligibility."
You can find the Wage Index here:

https://www.ssa.gov/oact/cola/AWI.html#Series
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Old 01-08-2016, 01:23 PM
 
1,227 posts, read 1,261,539 times
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Also, a small amount of change is due to the bend points changing. In 2015 they were $826/$4980 and in 2016 they are $856/$5157
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Old 01-08-2016, 01:56 PM
 
Location: Florida
4,373 posts, read 3,708,767 times
Reputation: 4116
Quote:
Originally Posted by Submariner View Post
Yes, I am 56 and I have been on pension since 2001.

If my previous wages get re-indexed each year, then would I be correct to assume the re-indexing would continue every year until I chose to begin taking SS?

As an organic farmer; I breed pigs and poultry; I produce honey, maple and a selection of veggies and herbs. I file income taxes every year. My farm income is usually off-set by farm expenses.

I do not really plan on taking SS benefits at 62, if I do not need this additional income stream. I may as well wait until I am 70.
I think from one of the posts your wages are indexed until you are age 60. Does not matter when you start SS.

I am not familiar with tax rules for farmers. But if you are filling a 1040 sch C for the farm income you would pay social security tax on the profits. Form SE. As you mentioned you do not have a profit. But it might be to your benefit to get to a small profit and pay a little SS tax as this could help your retirement benefit.

I agree, if you can wait until age 70.
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Old 01-08-2016, 03:28 PM
 
Location: Forests of Maine
30,692 posts, read 49,476,475 times
Reputation: 19136
Quote:
Originally Posted by rjm1cc View Post
I think from one of the posts your wages are indexed until you are age 60. Does not matter when you start SS.

I am not familiar with tax rules for farmers. But if you are filling a 1040 sch C for the farm income you would pay social security tax on the profits. Form SE. As you mentioned you do not have a profit. But it might be to your benefit to get to a small profit and pay a little SS tax as this could help your retirement benefit.

I agree, if you can wait until age 70.
Businesses file a Schedule C, land-lords file a Schedule E, and farms file a Schedule F.

We filed all three of them for 20 years, though right now we are down to only filing the Schedule F.

Regardless of how much gross income we earn each year, we have kept our AGI at either zero or possibly negative, and we have done so since 1983; to optimize our income tax obligation.
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