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Hi, if I retire at 59 and stop contributing towards Soc. Sec. (given that I have no income), how will that affect my Soc. Sec. benefit? If I start collecting at 62? I have been working for 35 years by now, contributing to Soc. Sec. this entire time. Thank you.
Hi, if I retire at 59 and stop contributing towards Soc. Sec. (given that I have no income), how will that affect my Soc. Sec. benefit? If I start collecting at 62? I have been working for 35 years by now, contributing to Soc. Sec. this entire time. Thank you.
Interesting question and I look forward to the replies. The benefit estimates always assume you will continue to work and contribute until the ages you see the estimates. I'm not sure how you can calculate the reduction
The SSA uses your 35 highest-paid years in calculating benefits. There are adjustments for inflation, so (for example) earning $50k ten years ago is a considered a higher-paid year than earning $50k this year.
If you have some years in your past that were lower-earning years, say you worked part time or for only part of the year, you could potentially replace those with higher-earning years by working longer. But the impact of replacing one or two "low" years with "high" years will not be dramatic.
The SSA uses your 35 highest-paid years in calculating benefits. There are adjustments for inflation, so (for example) earning $50k ten years ago is a considered a higher-paid year than earning $50k this year.
If you have some years in your past that were lower-earning years, say you worked part time or for only part of the year, you could potentially replace those with higher-earning years by working longer. But the impact of replacing one or two "low" years with "high" years will not be dramatic.
While all this is true how can the OP get an idea of his benefits if he stops working at 59? The SS estimates for say drawing at 62 assumes he will continue to work and contribute until he is 62.
Open an account on the SSA website
Once you input all information you will see the exact numbers. I had the same concern when I retired at 50 seven years ago. The graph they show, I think if you play around with it, can be set to assume zero income going forward.
Congratulations. You will now know what true freedom feels like.
While all this is true how can the OP get an idea of his benefits if he stops working at 59? The SS estimates for say drawing at 62 assumes he will continue to work and contribute until he is 62.
There are a few different calculators on the SSA website:
Unless a person is within a year of quitting work they will probably need to use the "Detailed Calculator". If you're close to your quitting year the "Online Calculator" may suffice.
Also, there are probably some calculators sold by private companies that can do this analysis, but I haven't used any of them myself.
Open an account on the SSA website
Once you input all information you will see the exact numbers. I had the same concern when I retired at 50 seven years ago. The graph they show, I think if you play around with it, can be set to assume zero income going forward.
Congratulations. You will now know what true freedom feels like.
Yes. I did this just two or three nights ago. You can change the estimated annual income box. I retired from my full-time job last summer just before my 52nd birthday. I'm now collecting pensions and working part-time, so a little different from the OP since I still have that part-time income. Regardless, I wanted to see how the estimate changed if I made what I make now each year over the next 10 years or so.
Yep. All of the advice above is spot on. Just go to the SSA website and use one of their online calculators.
It used to be not so easy. The online calculators were much more limiting in their scope. You used to have to download the AnyPIA calculator from the SSA website, manually fill it in with your yearly earnings from the last 30-40 years, and then run it yourself.
While all this is true how can the OP get an idea of his benefits if he stops working at 59? The SS estimates for say drawing at 62 assumes he will continue to work and contribute until he is 62.
The SS website has tools for this. The answer is that it won't affect it nearly as much as you think it will if you have 35 years of paid work. I did the math on the SS calculator before I retired at 51 and it didn't change my decision at all.
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