20 August 2008

Personalized Social Security Statement

In yesterday's mail, I received my annual "Your Social Security Statement" from the Social Security Administration (SSA). I decided it would be the year to understand the formula by which our Social benefits are figured. Of course, I was not able to achieve that. On a positive note, our government does not hide the formula—you can track it down on SSA websites. The important conclusion is that the formula protects citizens with lowest incomes and progressively decreases the benefit reward for citizens with highest incomes. (That's proportionate, of course. Maximum contributors to the system still have higher benefits in dollars.)

What I was able to achieve was a comparison of projected benefits according to different income levels. In other words, I was able to estimate benefits in case my income drops, stays the same, or increases over the next few years. (The estimate in my Paper Statement is based on my "current earnings rate" and does not consider other possibilities.) I also made age comparisons using 62 for early retirement, 65 for retirement in my Medicare eligibility year, 66 for "full" retirement, and 70 for delayed retirement. I did all this through the website that my Paper Statement directed me to (www.socialsecurity.gov/mystatement). I had used the online calculators before but today I took time to record all the steps.

Go to http://www.socialsecurity.gov/estimator

Look for the page titles alongside the SSA logo.

Page title: About the Retirement Estimator

Click red button, Estimate Your Retirement Benefits, or at bottom of page, click Continue button.

Page title: Acknowledgement For Online Services

Click on the I Agree button.

Page title: Information We Need

Enter identification factoids (including your Social Security Number)
Click Continue button.

Page title: Verify Your Information

Click Confirm button.

Page title: Create Your Retirement Benefit Estimator

Enter a number for last year's income
. (Don't fret about an exact figure—this page just gets you into the estimator. Suggestion: round your current salary to a user-friendly figure such as 40,000.)
Click Create Estimate button.

Page title: Your Retirement Benefit Estimate

The information probably looks a lot like the usual estimate in your Paper Statement from SSA.
Now, for the powerful part of this online tool, look to bottom right of screen for the next step.
Create Additional Scenarios button.

Page title: Retirement Estimator

Step One: Select an age (to get started, use 62 or 66).

Step Two: Enter an average salary; to get started, use the same salary as before (such as 40,000).

Click the Create Scenarios button.

Page title: Your Additional Retirement Scenarios

Finally, you reach the best of the estimator!
Mid-page, enter figures for additional scenarios—change the age, change the average salary.
To get started, add a lot of contrast:

.....Age 62 at average salary $20,000

.....Age 62 at average salary $40,000
Click Create Scenarios button

You will then see all 3 scenarios listed at bottom of page. You may need to scroll down, depending on the width of your screen.

You can continue entering new figures in the mid-page section called Create Additional Scenarios. Each time you make a change, click Create Scenarios button.

(You can also back up to the Scenario 1 page by clicking on the Previous button at bottom of page and re-setting the first estimate. Then proceed as before with Create Scenarios.)

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (www.marybold.com, www.boldproductions.com, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.

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