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Old 01-31-2017, 10:34 AM
 
Location: Idaho
4,657 posts, read 4,497,582 times
Reputation: 9155

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Today being my last working day before I start my pseudo retirement tomorrow, (to burn two months of accrued vacation before the official retirement), I downloaded my on-line Social Security statement.

My first observation was a bit of a minor shock in that the amount I would get at FRA was reduced from what it has been for the past year or so. About $20 less per month. A quick view of page 3 that includes "Your Earnings Record" show that my SS earnings for 2016 was only $4,056!

This is way, way off. I think it includes my earning from my community college teaching class, but not my day-time, mortgage-paying job. It most likely just 'fell through the cracks' and in that window when stuff is getting updated. (You can bet that I will be monitoring it to make sure my 'real job' earnings are included.) The benefit I would get at age 70 was reduced by about $125 per month!

That's a lot, over the course of time! Upon reflection, it told me something about retiring and waiting until age 70 to begin SS benefits, (as my financial advisor wants me to do). What it says is that on the on-line SS statement, the amount specified one would get at age 70 is the amount they would get if they were to continue working and earning somewhat the same wage between the current date and age 70.

For example, if my current statement says that I would get a monthly benefit of $5,000, (a totally bogus number, just used for illustration purposes), but I retire now and delay, and expecting that 5K . . . it would actually be reduced by some amount each year and I would only get maybe about $4,500 a month instead.

This could have implications for a retirement budget. Creating a budget today based on retiring now, but delaying receiving benefits because you can expect a certain amount later, but actually receiving less could throw a whole budget out of whack, especially if it is a tight one.

I guess I shouldn't be surprised by the difference. It is explained on the bottom of page 2, in bold type font. "And that amount may differ from the estimates above because: (1) Your earnings may increase or decrease in the future." Still, for a visual guy like myself that likes looking at figures, graphs, charts, and the bottom line number . . . it is an initial 'What the blazes is going on here'.

Submitted FWIW. Moral of the story . . . don't take the on-line statements as gospel truth. It even says so, but so often we forget, (or at least I do).

.
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Old 01-31-2017, 12:42 PM
 
Location: OH>IL>CO>CT
5,260 posts, read 8,453,388 times
Reputation: 7249
Your ES, on page 3, should have this explanation re current year's earnings,

"Some or all of your earnings from last year may not be shown on your Statement. It could be that we still were processing last year’s earnings reports when your Statement was prepared. Your complete earnings for last year will be shown on next year’s Statement."

https://www.ssa.gov/myaccount/SSA-7005-OL.pdf
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Old 01-31-2017, 12:53 PM
 
Location: SoCal
13,414 posts, read 6,411,220 times
Reputation: 10002
They readjusted my husband's SS in October. I don't know why but he did work one month in 2016.
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Old 01-31-2017, 03:07 PM
 
Location: Out West
276 posts, read 184,290 times
Reputation: 573
This happens to me every year. I do an annual one week independent contractor gig for about $1600 which gets reported to the IRS and SS in early January as a 1099. Meanwhile, my "real" wages don't get reported and added to that total until June or July, even though we file our income taxes in February. The effect on my SS online expected benefit is significant. For 4-5 months I have to see my expected benefit show a several hundred dollar/month drop. It's always a relief when all my income finally shows up sometime over the summer.

Last edited by PartIrish; 01-31-2017 at 03:07 PM.. Reason: typo
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Old 01-31-2017, 05:15 PM
 
Location: Florida
4,386 posts, read 3,728,408 times
Reputation: 4134
In the end they will pay you want you are due.

I would write to them and tell them that your wages from x employer are not posted. From your W2 you can get your employers tax ID. Also include your SS number and the amount of wages.

I would spend current assets now and postpone SS if you can. The increase in benefits are cheaper than buying an annuity.

Last edited by volosong; 01-31-2017 at 05:24 PM.. Reason: fixed typo that changed the meaning of the sentence.
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Old 01-31-2017, 05:26 PM
 
Location: Idaho
4,657 posts, read 4,497,582 times
Reputation: 9155
Quote:
Originally Posted by rjm1cc View Post
...I would spend current assets now and postpone SS if you can. The increase in benefits are cheaper than buying an annuity.
Different topic, but that's what my financial advisor says to do. I'm not sure I want to do that because once that 'nest egg' is gone, I won't be in a position to rebuild it or enough might not be left for when I really need it. Still weighing my options.


.
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Old 01-31-2017, 05:33 PM
 
14,041 posts, read 7,483,637 times
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I had a W-2 for the 2015 tax year that didn't make it into the Social Security database. The accounting firm botched the electronic transfer for all 40 employees in the company. Until that got straightened out, the estimated amounts for my Social Security check were off by a very large percentage.
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Old 01-31-2017, 05:41 PM
 
Location: RVA
2,175 posts, read 1,275,056 times
Reputation: 4501
Congrats on retiring! Far more important than $20/mo! FWIW, your projected estimates will always be too high, until you have retired and have a zero or low year, unless you have over 35 years maxed out and you are 62. That's because the estimates assume the last years included me for all future years. So your age 70 estimate, the year you look at it working until say 62, assumes you will have that income from 62 until 70! Thats 8 years of higher incomes added to or replacing lower ones, at that moment in time. If you are 62 now, that $150/mo reduction is probably closer to what you will get, in age 62 dollars. People don't comllain about it much because they don't realize the "Age 62 dollar part" . If your estimate for filing at 70, at age 62 is showing $4000/mo, it could easily be $4300 when you get to age 70. But $4300 in age 70 dollars may translate to only $3850 in age 62 dollars.
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Old 01-31-2017, 05:49 PM
 
6,704 posts, read 3,783,842 times
Reputation: 13830
Quote:
Originally Posted by volosong View Post
Today being my last working day before I start my pseudo retirement tomorrow, (to burn two months of accrued vacation before the official retirement), I downloaded my on-line Social Security statement.

My first observation was a bit of a minor shock in that the amount I would get at FRA was reduced from what it has been for the past year or so. About $20 less per month. A quick view of page 3 that includes "Your Earnings Record" show that my SS earnings for 2016 was only $4,056!

This is way, way off. I think it includes my earning from my community college teaching class, but not my day-time, mortgage-paying job. It most likely just 'fell through the cracks' and in that window when stuff is getting updated. (You can bet that I will be monitoring it to make sure my 'real job' earnings are included.) The benefit I would get at age 70 was reduced by about $125 per month!

That's a lot, over the course of time! Upon reflection, it told me something about retiring and waiting until age 70 to begin SS benefits, (as my financial advisor wants me to do). What it says is that on the on-line SS statement, the amount specified one would get at age 70 is the amount they would get if they were to continue working and earning somewhat the same wage between the current date and age 70.

For example, if my current statement says that I would get a monthly benefit of $5,000, (a totally bogus number, just used for illustration purposes), but I retire now and delay, and expecting that 5K . . . it would actually be reduced by some amount each year and I would only get maybe about $4,500 a month instead.

This could have implications for a retirement budget. Creating a budget today based on retiring now, but delaying receiving benefits because you can expect a certain amount later, but actually receiving less could throw a whole budget out of whack, especially if it is a tight one.

I guess I shouldn't be surprised by the difference. It is explained on the bottom of page 2, in bold type font. "And that amount may differ from the estimates above because: (1) Your earnings may increase or decrease in the future." Still, for a visual guy like myself that likes looking at figures, graphs, charts, and the bottom line number . . . it is an initial 'What the blazes is going on here'.

Submitted FWIW. Moral of the story . . . don't take the on-line statements as gospel truth. It even says so, but so often we forget, (or at least I do).

.
I just discovered this myself last week.

I'm so glad to know I'm not imagining things, and that someone else noticed the same thing.

Mine decreased a lot more than $25/month!
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Old 01-31-2017, 05:53 PM
 
6,704 posts, read 3,783,842 times
Reputation: 13830
Quote:
Originally Posted by rjm1cc View Post
In the end they will pay you want you are due.

I would write to them and tell them that your wages from x employer are not posted. From your W2 you can get your employers tax ID. Also include your SS number and the amount of wages.

I would spend current assets now and postpone SS if you can. The increase in benefits are cheaper than buying an annuity.
What he is saying is that delaying his benefits is not beneficial to one who is not working or not earning much income.

Because the full retirement benefits are based on the assumption that you will be getting paid the same every year until you file for SS. Which he won't be.

But if he gets the benefits NOW, he actually gets more.

I noticed the same thing on mine.

In other words, it does NOT increase every year until full retirement, if you are not working, any more. It DEcreases.

Mine decreased this year from last year (early retiree)....lot less income than when I worked. It will decrease again next year, no doubt.
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