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I'm 59 and very seriously considering early retirement. I can support myself and wife until I am 70 then begin to take Social Security. I have 35 years of history paying SS. I have my most recent projection from the Social Security people and wanted to know a few details;
- If I retire now and claim when I am 70 will I get approximately what the estimate says?
- Do I lose out by not working for the next 10 years or so, ie, I have a 35 yr record but when I retire at 70, I will still have the same 35yr history buy no payments for the last 10 years - does that impact things?
- Does the estimated number continue to grow with Inflation/COLA over the next 10 years before I start payments ?
Sorry for all the questions but I don't want to wake up in 10 years and find I don't get the SS payments that I expect now.
The Social Security estimate is an estimate based upon the assumption that until you are FRA you will continue to earn approximately what you are earning now. Since the formula depends on an average of your 35 years of highest indexed wages, if your earnings have been relatively stable throughout these past 35 years, you should get approximately what the estimate estimates.
If your earnings were significantly lower for a number of prior years, and Social Security is guessing that the next years until FRA will replace those significantly lower earning years, then the estimate could be too high by a bit.
If you work for 10 more years and make significantly higher wages in those 10 years, your benefit will increase because there will be 10 higher earning years replacing 10 lower earning years in the average.
Your social security benefit is increased with COLA regardless of whether or not you are working.
yep , that is a very important point . working longer may not have any effect on your ss amount unless the years bump some lower earning years .
people may think because they are working part time they are increasing ss amounts but nope they are not unless it bumps lower years . .
i retired at 62 but was working only 4 days a week prior to retiring so i got pretty much what the estimates were since the future earnings estimates ss did were based on my part time year amounts .
i worked part time because i liked it and i wanted to transition myself out in phases .
so i actually stopped at 62 , except for my 1 day teaching but did not collect until 65 .
ss uses your 35 highest years adjusted for inflation . so if you are working and your highest year is the current one then it is assumed you will work , bounce lower earning years out until you actually collect .
if you stop earlier and don't actually bump as many lower years out then yes you will get a bit less
I'm 59 and very seriously considering early retirement. I can support myself and wife until I am 70 then begin to take Social Security. I have 35 years of history paying SS. I have my most recent projection from the Social Security people and wanted to know a few details;
- If I retire now and claim when I am 70 will I get approximately what the estimate says?
- Do I lose out by not working for the next 10 years or so, ie, I have a 35 yr record but when I retire at 70, I will still have the same 35yr history buy no payments for the last 10 years - does that impact things?
- Does the estimated number continue to grow with Inflation/COLA over the next 10 years before I start payments ?
Sorry for all the questions but I don't want to wake up in 10 years and find I don't get the SS payments that I expect now.
Regards
Brian
I’m in the exact same situation. I retired at 55 with 35 years and plan to take SS at 70. So far it has updated my work situation online. But honestly, I don’t care that much. I will get close to the max, not the absolute max. Not worth losing sleep over. I believe the max amount will keep increasing until I’m 70.
Last edited by NewbieHere; 11-30-2018 at 10:27 AM..
Hi, thanks everyone for the inputs - plenty to think about !!
A couple of follow on questions.
- So if I am trying to compare working another year and whether or not those earnings bump a lower earning year off the calculation - do I just look whether I maxed out the SS Tax or do I have to try and adjust a 35 year old income into todays dollars. For example, 35 years ago I earned say $30,000 which maxed out my SS for that year. Next year if I earn say $130,000 which also max's out the SS Tax - is it not worthwhile working since both yrs max'd out the tax. OR should I work in order to remove a low income year from the calculation??
- Does anyone have a projection of the minimum payment in 2030 assuming I am 70 at that time, ie, the minimum has gone up by ~24% since I waited from age 67 to age 70 to start payments.
- Somewhat different question - I worked in Canada for 3 of my 35 years - my Social Security estimate shows those years as 0 income and 0 taxes paid in. Has anyone any experience of getting the SS to recognize my Canadian equivalent of SS which I paid at the time. Note - I did file US Taxes in addition to my Canadian taxes etc for all 3 years, its just no SS taxes were paid.
I have one year with $20 back in 1980, it’s adjusted to maybe $1000 today. I’m not working an extra year to make up for that. But my sister is doing that. The minimum at age 70 depends on your earning history.
For Canadian system, you need check what’s the minimum of years you need to work there. You may get nothing for those 3 years. Google is your friend.
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