Because of the way the social
security benefit calculation works, you may get a big boost in your benefit, a small boost, or no boost at all.
Understanding the Social
Security Benefit Calculation You aren't likely to go through all the number crunching needed to do the actual calculation, but it can be useful to get a better understanding of how the calculation works.
Indexed Earnings: We use the Social Security Administrations National Average Wage Index to index wages for the social
security benefit calculation
Not exact matches
Marc Kiner, CPA, is co-creator of the National Social
Security Advisors certification program, which provides financial professionals a foundational educational program in major Social
Security topics, such as claiming strategies, coordination of spousal
benefits and
benefit calculations.
CAP also determines Social
Security benefits based on projected wages across the worker's career and includes the difference in Social
Security earnings in the retirement
calculation for 15 years after retirement.
But Vernon's
calculations show that about the worst thing you can do for your long - term planning is take Social
Security benefits early at age 62.
The good news is that these earnings can also count toward the
calculation of your
benefits: Social
Security checks your earnings record each year and will increase your
benefit, if appropriate, based on these additional earnings.5
- retirement savings and income - Pre-59 1/2 72t
Calculations (avoiding penalty tax)- college savings and 529 plan illustrations - college cost and tuition data - Coverdell education savings - risk profile questionnaires and quizes - model portfolio illustrations - asset allocation and portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield
Calculations (avoiding penalty tax)- college savings and 529 plan illustrations - college cost and tuition data - Coverdell education savings - risk profile questionnaires and quizes - model portfolio illustrations - asset allocation and portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined
Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield calcu
Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return
Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield
Calculations - Paycheck Tax Savings - Required Minimum Distribution
calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield
calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social
Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield calcu
benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield
calculationscalculations
- retirement savings and income - Pre-59 1/2 72t
Calculations (avoiding penalty tax)- college savings and 529 plan illustrations - college cost and tuition data - Coverdell education savings - risk profile questionnaires and quizes - model portfolio illustrations - asset allocation and portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield
Calculations (avoiding penalty tax)- college savings and 529 plan illustrations - college cost and tuition data - Coverdell education savings - risk profile questionnaires and quizes - model portfolio illustrations - asset allocation and portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined
Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield calcu
Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return
Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield
Calculations - Paycheck Tax Savings - Required Minimum Distribution
calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield
calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social
Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield calcu
benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield
calculationscalculations
For more information about the tax
calculations for each state, see 13 States That Tax Social
Security Benefits.
There you can view your current
benefit based on your contributions to date and Social
Security's
calculation of your past income.
(This
calculation excludes those on Social
Security disability
benefits who were automatically converted over to retirement
benefits.)
A significant number of seniors include Social
Security benefits when making their
calculations, but it's not always enough to close the gap.
Distributions you take from a Roth IRA don't count as «tax - exempt income» that goes into the
calculation of how much of your social
security benefit is taxable.
Income means more than a paycheck; income
calculations can include Social
Security benefits, combat pay, and even contributions to retirement accounts.
We can start with the percentage of income Social
Security replaces for people at the top of the wage base — the $ 118,000 cap on income that is included in the
benefits calculation.
Working longer can also boost the eventual size of your Social
Security check, as each year you delay claiming Social
Security up to age 70 increases your
benefit by roughly 7 % to 8 % a year, possibly more since the extra years of work may boost the lifetime earnings
calculation the Social
Security Administration makes to determine your monthly
benefit.
Since Social
Security benefits are indexed for inflation, you can use
benefits in today's dollars at this point in your
calculations.
Keep in mind that the savings rate
calculations so far have been based on certain assumptions about Social
Security retirement
benefits, the real rate of return you can expect on your investments, and a safe withdrawal rate from your retirement savings.
The details of the hypothetical couple's Social
Security choices has nothing to do with your circumstances but it highlights the importance of runnng the
calculations for various scenarios before you make your decision on when and how to begin Social
Security benefits.
In contrast, since earnings in a CD are taxable when earned, your interest earnings count in the
calculation of how your Social
Security benefits will be taxed even if you don't withdraw the earnings.
In an ideal world, you wouldn't factor Social
Security benefits into your retirement income
calculations at all.
The basis for Florida's child support
calculations is each parent's gross income, which includes wages, bonuses, commissions, business income, disability
benefits, workers» compensation
benefits, pension payments, social
security benefits and rental income, among other types of income.