social security benefits

Calculating Your Social Security Benefits

A reader of AskTheMoneyCoach.com had a question about their social security benefits. Here is what the person asked:

Q: Where can I go to calculate my future social security benefits?

A: The official website of the U.S. Social Security Administration is the best and easiest resource to calculate your social security benefits. You can find the agency online at http://www.socialsecurity.gov.

Once you’re there, look at their retirement estimator which tells you how much you can project or what you can expect to receive in based on your Social Security earnings record.

Now, of course, these are just estimates, and the exact benefit that you might get in the future could change for a whole host of reasons. It could be adjusted for inflation.

Their estimates online also make assumptions about your career, things about how much you’re going to make in the future and how long you’ll keep working.

Obviously, your earnings record is consistently updated every single year, and that could cause some of the underlying assumptions and calculations to be tweaked and modified.

But do check out http://www.socialsecurity.gov/estimator for information on the Social Security Administration’s retirement estimator.

You can use this estimator if you’ve already accrued enough Social Security credits to qualify for benefits and if you do not fit into any of these four categories:

–       You are waiting for a decision about Medicare or application for benefits;

–       You are currently receiving benefits from Social Security;

–       You are 62 or older and receiving benefits on another Social Security record;

–       You are eligible for a pension based on work that’s not covered by Social Security.

One of the interesting things that the Social Security Administration also offers online is an actual benefits calculator, which is another nifty tool.

With this calculator, it uses the actual amounts that you enter. In other words, it’s not linked to your precise Social Security earnings record. But, these calculators are helpful.

You can even download them from their website. That is at http://www.ssa.gov/planners/benefitcalculators.htm.

The whole point of the calculators is to estimate your potential retirement benefits amounts using different retirement dates and different levels of future earnings.

This retirement calculator online from the Social Security Administration will also show your disability and survivor benefits, if you should die or become disabled.

It’s important information for anybody to know if you’re trying to make projections about how much government money you’re going to get in the future.

Speaking of which, one thing you should know is that you receive a pension from a federal, state or local government based on work where you did not pay Social Security taxes, your Social Security spouse’s or widow’s or widower’s benefits may be reduced by two-thirds of your government pension.

For example, if your government pension is $900, then two-thirds of that, or $600, must be deducted from your Social Security benefits. So assume your were eligible to get a $700 spouse’s, widow’s or widower’s benefit from Social Security.

Well, now you will receive only $100 per month from Social Security ($700 – $600 = $100).

Even if you take your government pension in a lump sum, Social Security still will still calculate the reduction as if you chose to get monthly benefit payments from your government work.

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