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Old 10-04-2016, 10:42 AM
 
Location: Albuquerque
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I'm 63 and 4 months. My social security says at 66 I'll get $1930/month. At 63 I should get 80% right? But when I log into my SS account it says I'll get $1470 if I retire now. Now 80% of $1930 is $1544 not $1470. Why the disparity?
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Old 10-04-2016, 10:59 AM
 
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https://www.ssa.gov/OACT/quickcalc/earlyretire.html


Reduction applied to primary insurance amount ($1,000 in this example). The percentage reduction is 5/9 of 1% per month for the first 36 months and 5/12 of 1% for each additional month.
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Old 10-04-2016, 12:09 PM
 
Location: OH>IL>CO>CT
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The chart at https://www.ssa.gov/OACT/ProgData/ar_drc.html also says 80% of FRA for someone born 1953 claiming at age 63.

Also 36 months (66-63) of the 5/9ths of 1% = a 20% reduction

You may need to call SS on this issue.
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Old 10-04-2016, 12:52 PM
 
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It is because the calculator assumes you'll keep working at the same salary therefore accruing more credits, whereas if you retire now, the accrual stops.
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Old 10-04-2016, 01:16 PM
 
Location: Eastern Tennessee
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Quote:
Originally Posted by bigbear99 View Post
It is because the calculator assumes you'll keep working at the same salary therefore accruing more credits, whereas if you retire now, the accrual stops.
yup
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Old 10-04-2016, 02:50 PM
 
Location: Albuquerque
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So the question is if I retire at 65 will I get 93% of the $1930 (about $1800/month) or not? If not it's a little misleading don't you think?
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Old 10-04-2016, 03:38 PM
 
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use the calculator with a retire age of 65. It's impossible to estimate without your past work (pay) history.
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Old 10-04-2016, 04:37 PM
 
Location: RVA
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You still have not said whether you will stop working at what age or continue to what age. How would you expect an online calculator to "know" that? It ASSUMES and spells out, that you will make the same amount as you did last year until you file. What else COULD it assume? So until that data is known the $1930 amount is ALSO only an estimate. There are more complicated online calculators that calculate your SS at different ages based on your birthday, SS numbers from your SS generated FRA, when you will stop working (meaning no more payments in to SS), and what date you want to start collecting. Try SSAnalyze.

Personally, I think $74 out of $1500 is a pretty good estimate. That's within 5%. That's why it's called an estimate, and not your "guaranteed SS check amount".
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Old 10-04-2016, 06:17 PM
 
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When you stop working, you are not longer replacing lower earning years with higher in the calculation so there can be a difference. Especially if there is a bump in earnings.

The other thing is depending on your work history you could be falling under the windfall elimination provision. Depending on how many years you work and what calculator you use the results can be very different. WEP usually applies to people that had a period of time that they paid into a private pension fund or didn't pay social security in the USA.

Also if you don't use the calculator properly, provide your entire 40 years of earnings and or are not careful with your retirement date (the date you stop working) the calculations can be wrong. Most of the calculators I've used essentially assume you work until you claim and at your highest earnings or at some modified inflated number from your last provided earnings.

Those things can make a difference.
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