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Old 07-10-2019, 08:46 PM
 
Location: East Coast
2 posts, read 758 times
Reputation: 10

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Hello. First post! Not retired yet, but looking forward to it. I was just on the social security website and I noticed something unusual. Under my estimated benefit amounts, it listed my age 67 FRA amount as $2,957 per month. It then listed my age 62 early retirement age amount as $1,937 per month. I know that the age 62 amount is reduced to 70% of your FRA, but when I plugged the numbers into a calculator mine came out as 65.5% of the FRA. Has anyone else noticed this? Is it a glitch? Any ideas? Thank you!
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Old 07-11-2019, 02:39 AM
 
72,736 posts, read 72,559,630 times
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not sure why the difference , except they do say If your birthday is on the 1st of the month, we figure your benefit as if your birthday were in the previous month.

i assume you were born after 1960 ?


from ss website

Here's how it works if your full retirement age is 67.
If you start your retirement benefits at age 62, your monthly benefit amount is reduced by about 30 percent. The reduction for starting benefits at age
63 is about 25 percent;
64 is about 20 percent;
65 is about 13.3 percent; and
66 is about 6.7 percent.
If you start receiving spouse's benefits at age 62, your monthly benefit amount is reduced to about 32.5 percent of the amount your spouse would receive if their benefits started at full retirement age. (The reduction is about 67.5 percent.) The reduction for starting benefits as a spouse at age
63 is about 65 percent;
64 is about 62.5 percent;
65 is about 58.3 percent;
66 is about 54.2 percent; and
67 is 50 percent (the maximum benefit amount).

https://www.ssa.gov/planners/retire/1960.html
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Old 07-11-2019, 06:21 AM
 
Location: Florida
4,433 posts, read 3,776,016 times
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I think they assume you will continue to work to 62 or FRA. Thus the 62 benefit has a lot less years of work.
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Old 07-11-2019, 08:56 AM
 
488 posts, read 101,701 times
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This may not directly address your question, but one thing many people overlook or ignore (I know I did) in those benefit estimates provided by SSA is the assumption that you will CONTINUE WORKING until each of the ages listed. In other words, that you must continue working until FRA or 70 to qualify for the full amounts estimated for those ages, respectively.

What they do not show is the impact of stopping work at an earlier age (62 for example), but delaying SS payments until a later age. That is certainly acceptable, and may even be preferable (depending on your circumstances)... but the little table of estimates doesn't show that scenario. It's been a while since I did this, but I believe you can log into your account on SSA, enter in the variables for stopping work at age X and collecting at age Y, and see the actual amounts... which will be reduced from the estimates they send you every year. It was interesting to see the effect, relative to working all the way through.

Again, my apologies if this doesn't explain your glitch. Still worth noting.
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Old 07-11-2019, 09:06 AM
 
72,736 posts, read 72,559,630 times
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They assume if your years now are your highest earning years inflation adjusted that you will continue to work and earn that level and bump lower years out
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Old 07-11-2019, 11:37 AM
 
Location: Northern VA
515 posts, read 640,986 times
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I've been tracking my SS statements for the last 5 years (and my birthday is on the 1st).

My age 62/FRA percentage in 2015 was 66.89%. In 2019 it was 67.87%. It rose in 2016 (66.92%) and 2017 (67.08%) but dropped in 2018 (66.79%). My FRA and age 62 $ amounts increased in all three years. In 2019 my FRA amount decreased (took a significant pay cut) but my age 62 amount increased and correspondingly my percentage increased to 67.87%.


I have no idea what any of these numbers mean but its curious seeing the variation. I would expect to see the same percentage or maybe a discernible pattern in the variation. I was quite surprised to see my age 62 amount go up when my FRA amount went down.
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Old 07-11-2019, 01:28 PM
 
Location: Ohio
20,151 posts, read 14,367,086 times
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Quote:
Originally Posted by djplourd View Post
I've been tracking my SS statements for the last 5 years (and my birthday is on the 1st).

My age 62/FRA percentage in 2015 was 66.89%. In 2019 it was 67.87%. It rose in 2016 (66.92%) and 2017 (67.08%) but dropped in 2018 (66.79%). My FRA and age 62 $ amounts increased in all three years. In 2019 my FRA amount decreased (took a significant pay cut) but my age 62 amount increased and correspondingly my percentage increased to 67.87%.


I have no idea what any of these numbers mean but its curious seeing the variation.
Nothing wrong with it.

Social Security uses a formula employing square root regression (a standard practice) to determine your benefit amounts based on anticipated future wages.

Social Security cannot know what your wages will be this year, or next year or any other future year, but they can make a reasonable guess by looking at your entire annual wage history and applying a forecasting formula that uses square root regression to estimate your future wages.

The margin of error is Ī 3% but could be as high as Ī 5% if there is great variance in your wage history.
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Old 07-11-2019, 05:49 PM
 
Location: East Coast
2 posts, read 758 times
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Thank you for your thoughts, everyone. I think I am seeing this a little clearer now. The two amounts listed on the statement (age 62 and FRA) are arrived at independently of each other. I thought SS simply calculated a person's FRA benefit amount and then reduced it by a percentage for retiring at an earlier age.

Instead it looks like the FRA amount (age 67 for me) assumes that I will work until 67 and earn the same amount of money as I'm making now. The age 62 benefit estimate is arrived at by assuming that I retire at 62 and thus have five less years of income.

As someone once said, the SS benefit statements aren't to be trusted for people under 60 as there are so many assumptions and variations built into the system.

We probably won't know the exact amount of our SS until we receive the first check!
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Old 07-11-2019, 06:13 PM
Status: "Put the Wet Stuff on the Red stuff" (set 26 days ago)
 
Location: USA
1,538 posts, read 500,802 times
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Donít forget about Medicare Benefits. They donít kick in at 62 so you need to figure out how to handle your medical coverage until you qualify for Medicare as well as your budget to buy supplemental medical from AARP or other providers.
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Old 07-13-2019, 02:48 PM
 
2,215 posts, read 2,025,797 times
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Quote:
Originally Posted by FireStation46 View Post
Donít forget about Medicare Benefits. They donít kick in at 62 so you need to figure out how to handle your medical coverage until you qualify for Medicare as well as your budget to buy supplemental medical from AARP or other providers.
Does anyone know how SS benefits count toward Obamacare subsidies? For example if you are under 65 and buying a health plan under ACA with a subsidy and then start collecting Social Security does that full amount get counted toward the income limits for an Obamacare subsidy?
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