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Old 02-20-2018, 12:13 PM
 
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I did my research and it didn't make me any smarter on the topic.

Can someone, please, in simple language, explain how exactly is SSI calculated? Or, based on? Is it based on income? Year one takes SSI, regardless of income? I checked on SSI site December last year, then not so long ago this year, they do have my last year 6 figure income, SSI pension didn't even change a penny.
That's why I am confused. I get it, they want me to work till 70, I get that.
Anyone?
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Old 02-20-2018, 12:16 PM
 
Location: NC
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To be eligible you must have contributed for at least 10 yrs. There is a formula based on an average of your earnings (where you contributed) for the top earning 35 yrs. Years you did not work equal zero dollars.
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Old 02-20-2018, 12:19 PM
 
Location: equator
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Do you mean SS? SSI is for disabled or mentally ill, or destitute. It's like $700 a month!
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Old 02-20-2018, 01:17 PM
 
Location: NYC
2,896 posts, read 1,580,961 times
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Quote:
Originally Posted by ukrkoz View Post
I did my research and it didn't make me any smarter on the topic.

Can someone, please, in simple language, explain how exactly is SSI calculated? Or, based on? Is it based on income? Year one takes SSI, regardless of income? I checked on SSI site December last year, then not so long ago this year, they do have my last year 6 figure income, SSI pension didn't even change a penny.
That's why I am confused. I get it, they want me to work till 70, I get that.
Anyone?
We, & our employers, pay a percentage of our wages into the SS fund. As mentioned our highest 35 years are what is counted for the final calculation, all these years are annually adjusted for inflation so those early years you had a 4 digit income may actually be adjusted to 5 figures for the calculation.

If you have had recent year incomes at or near 6 figures another year isn't going to boost your figure a lot, same with stopping work a year or 2 before 66, it's not going to affect the outcome too much.

I'm not sure when the SSA adjusts their annual estimates either, perhaps this year's isn't baked in to the formula yet. You lose a percentage each year before 66 that you apply for it, you get an additional percentage for each year after that until 70. If we live till about mid-80's the sum of SS payments in toto will be the same so SS doesn't care when we take it, it's just delaying for more guaranteed income when older.
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Old 02-20-2018, 02:12 PM
 
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Yes, I meant Social Security, not disability.
So it is no the last 2 years you work. Someone told us it's based on the last 2 years, "so make sure you make a lot in those 2".
Yep, worked much longer than 10 and last 6 or 7 now back, are 6 figure.
I actually tried that calculator and got lost in it. One on SS site. It does not work too well for my situation.
I have 3 yrs left till 66. Well, 3 and 4 months. No intentions to work till 70. I mean - I know it's not working till 70, it's not drawing till 70. Maybe simply go part time or consulting after 66.5 for basic income to not draw.
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Old 02-20-2018, 02:34 PM
 
Location: WA
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https://www.ssa.gov/oact/progdata/retirebenefit1.html
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Old 02-20-2018, 03:00 PM
 
Location: Ohio
19,873 posts, read 14,217,545 times
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Quote:
Originally Posted by ukrkoz View Post
Can someone, please, in simple language, explain how exactly is SSI calculated?
Supplemental Security Income (SSI) is not calculated.

Quote:
Originally Posted by ukrkoz View Post
Or, based on?
It's based on a federal law. SSI is paid out of the General Revenue Fund, not OASI or OADI.

Quote:
Originally Posted by ukrkoz View Post
Is it based on income?
Your monthly SSI payment of $750 may be reduced if you work and earn too much income.

Quote:
Originally Posted by ukrkoz View Post
Year one takes SSI, regardless of income? I checked on SSI site December last year, then not so long ago this year, they do have my last year 6 figure income, SSI pension didn't even change a penny. That's why I am confused. I get it, they want me to work till 70, I get that.
Anyone?
It would appear you're very confused.

Are you referring to OASI (Social Security Retirement)?

It's easy to calculate your own Social Security Retirement benefits.

If you've worked more than 35 years, Social Security looks at the highest wages/salary you've earned. If you did not work for a full 35 years, then either enter $0 for those years, or your estimated wage/salary for those years.

The first step is to convert your wages/salary to account for inflation and other factors. Use this web-page:

https://www.ssa.gov/oact/cola/AWI.html#Series

Use the most recent year on the index (2016) which shows $48,642.15

For each year you worked, divide $48,642.15 by the indexed wage for that year.

For example, I earned $4,451 in 1981. The index for 1981 shows $13,773.10

$48,642.15 / $13,773.10 = 3.53

Multiply the earnings from 1981 by 3.53

$4,451 * 3.53 = $15,712.03

The wage is now indexed to account for inflation and other factors. In Microsoft Excel, use the "$" to lock in the base index year (2016) of $48,642.25 and you can change that easily for upcoming years.

Do that for all years you had earnings.

Take the top 35 years and add them together, then divide by 420.

35 years is 420 months.

That will give you your average monthly earnings.

If your average monthly earnings are $895 or less, multiply by 90% and you're done. Your monthly Social Security Retirement benefit will be 90% of your average monthly earnings.

$895 * 90% = $805.5

If your average monthly earnings are >$895 but <$5,397, then subtract $895 from your average monthly earnings and multiply the result by 32%. Add that result to $805.50 and that will be your monthly Social Security benefit.

If your average monthly earnings are >$5,397, then subtract $5,397 from your average monthly earnings and multiply by 15%, then add that to your previous two results, and that will be your monthly Social Security benefit, which should not exceed $2,788/month.

That assumes you are retiring at full retirement age. If you're not, then you'll need to decrease your monthly benefit by a certain percentage, depending on how early you retire.
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Old 02-20-2018, 03:04 PM
 
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there is ssdi , ssi and ss retirement benefits . which one are we talking about ?
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Old 02-21-2018, 04:48 PM
 
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Normal pension you get after you worked and retired. Work>retirement>pension. No pension from employer, never had that luxury.
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Old 02-21-2018, 05:47 PM
 
Location: OH>IL>CO>CT
5,225 posts, read 8,384,895 times
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Quote:
Originally Posted by ukrkoz View Post
Normal pension you get after you worked and retired. Work>retirement>pension. No pension from employer, never had that luxury.
Most people ( and the IRS) make a distinction between Social Security Retirement benefits, and an employer or union sponsored pension.

SSA's best explanation of SS benefit calculation is provided at this SSA webpage:
https://www.ssa.gov/pubs/EN-05-10070.pdf

BTW, I AFAIK SSA never uses the word pension, it's always benefits. See https://www.ssa.gov/planners/index.html
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