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.
Click 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.

SSA Offering: Retirement Estimator

Retirement calculators litter the web. The newest (quite possibly!) is published by Social Security Online. Called the Retirement Estimator, this tool estimates Social Security (SS) benefits only for people who are not yet collecting SS. The calculation is based on your data already in the system plus your entry of your last year's income or what you think your "last year" will be at the time you stop working. If you are a very young boomer (in your 40s), you may have difficulty projecting your salary 20 years out. If you are closer to the typical retirement ages (62 and 66), you can probably make a good guess and thereby produce a realistic estimate of future benefits.

Multiple scenarios. What I like best about the calculator is the ability to produce several different estimates. So, I entered stats for age 55, age 62, and age 66. Scenario building requires that you name a salary for each "stop" year, so precision is not the goal here. Making comparisons is.

Extra boomer woman issue: Playing around with the Retirement Estimator invites consideration of an issue for women who may end up drawing on a spouse's or ex-spouse's figure. (Complex enough for its own blog entry. On another day.) That information is not incorporated, so the Estimator provides just part of the picture for women.

One more issue: Using the Estimator requires that you enter your Social Security number in addition to name, birth year, and last year's salary. If you have a concern about entering such data, this benefit calculator is not for you. (You can find more generic versions around the web.)

Imagining the research potential: On the topic of data, I found myself imagining what the Retirement Estimator produces for the Social Security Administration. I doubt that SSA is tracking my personal "what if" scenarios, but I do wonder if a more general data set is being generated. Wouldn't it be neat to know if Americans are seeking estimates for 5 years from now? Or maybe 10 years? Or even more?

© 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.