Is Social Security Mis-Estimating My Future Benefit?

Jul 17 2016 - 12:00am

Dear Larry,

I was estimating my benefit at 66 & 2 months through age 70, by increasing the estimated benefit by 8% each year. However, at 70, the amount is $55 less than the figure provided by the SSA. Is this simply due to rounding??

Thank you, Paul

Dear Paul,

That's far too big for a rounding error. Social Security benefit estimator may be incorporating what's called the Re-computation of Benefits if you've told it you will still be working and if your future earnings raises your level of AIME (Average Indexed Monthly Earnings). Social Security's benefit estimators assume no future economy-wide average wage growth, no future inflation, and that you will retire at full retirement age. Our software makes none of these assumptions. I recommend you run it to understand precisely what you will get.

best, Larry