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As you make
plans for your future, one of the questions you should ask is, "How
much will I get from Social Security?" There are several ways you
can find out. Social Security sends a yearly statement to everyone age
25 or older who has worked under Social Security and does not yet receive
benefits. You should receive a Social Security Statement every year about
three months before your birthday.
You also can request a statement
by calling Social Security and asking for a form SSA-7004, Request
for Earnings and Benefit Estimate Statement, or by downloading the
form from the Internet at www.ssa.gov/online/ssa-7004.html.
Or, you can calculate your benefit yourself using the programs available
on the Internet at www.ssa.gov/retire2.
Even with an estimate, however, many
people still wonder exactly how their benefit is figured. Social Security
benefits are based on earnings averaged over most of a worker's lifetime.
Your actual earnings are first adjusted or "indexed" to account
for changes in average wages since the year the earnings were received.
Then we calculate your average monthly indexed earnings during the 35
years in which you earned the most. We apply a formula to these earnings
and arrive at your basic benefit, or "primary insurance amount"
(PIA). This is the amount you would receive at your full retirement age,
65 or older, depending on your date of birth. The full retirement age
for people born in 1939 is 65 and 4 months. This age will increase gradually
each year until it reaches 67 for people born in 1960 or later.
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Factors That Can Raise Or Lower Your Retirement Benefit
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The monthly
benefit you receive from Social Security may not be the basic benefit.
Your actual benefit may be higher or lower than that amount if any of
the following is true.
-
You receive benefits before
your full retirement age.
You can begin to receive Social
Security benefits as early as age 62, but at a reduced rate. Your
basic benefit will be reduced by a certain percent for each month
that you receive benefits before your full retirement age. The closer
you are to your full retirement age when you begin receiving benefits,
the greater your benefit amount.
-
You receive cost-of-living
increases.
You are eligible for cost-of-living
benefit increases starting with the year you become 62. This is
true even if you don't get benefits until 65 or even 70. Cost-of-living
increases are added to your benefit beginning with the year you
reach 62 up to the year you start getting benefits.
-
You delay your retirement
past your full retirement age.
You may continue working past
the full retirement age and not begin to receive Social Security
benefits. If you choose to do this, your benefit amount will be
increased by a certain percent for every month that you are past
your full retirement age but do not receive benefits. These increases
are automatically added to your benefit until you reach age 70.
-
You are a government
worker with a pension.
If you also get or are eligible
for a pension from work where you didn't pay Social
Security taxes,(usually a government job), a different formula is
applied to your average monthly earnings. To find out how your benefit
is figured, contact us and ask for a copy of
A Pension From Work Not Covered By Social Security
(Publication No. 05-10045).
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Estimating Your Social Security Retirement Benefit
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For Workers Born In 1939
This
worksheet shows how to estimate the Social
Security monthly retirement benefit you would be eligible for at
age 62 if you were born in 1939. It also allows you to estimate
what you would receive at age 65 and 4 months, your full retirement
age, excluding any cost-of-living adjustments for which you may
be eligible. If you continue working past age 62, your additional
earnings could increase your benefit.
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Step
1:
Enter your actual earnings
in Column B, but not more than the amount shown
in Column A. If you have no earnings, enter "0." |
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Step
2:
Multiply the amounts in
Column B by the "index factors" in Column
C, and enter the results in Column D. This gives you your "indexed
earnings," or the approximate value of your earnings in current
dollars. |
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Step
3:
Choose from Column
D the 35 years with the highest amounts. Add these amounts.
|
$__________________ |
Step
4:
Divide the result from
Step 3 by 420 (the number of months in 35 years). Round down to
the next lowest dollar. This will give you your average indexed
monthly earnings. |
$__________________ |
Step
5:
- Multiply the first $561 in Step 4 by 90%.
|
$__________________
|
-
Multiply the amount in Step 4 over $561 and
less than or equal to $3,381 by 32%.
|
$__________________ |
- Multiply the amount in Step 4 over $3,381 by 15%.
|
$__________________ |
Step
6:
Add a, b and c from Step
5. Round down to the next lowest dollar. This is your estimated
monthly retirement benefit at age 65 and 4 months, your full retirement
age. |
$__________________ |
Step 7:
Multiply the amount in
Step 6 by 78.33%. This is your estimated monthly retirement benefit
at age 62. |
$__________________ |
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|
Year |
A. Maximum Earnings |
B. Actual Earnings |
C. Index Factor |
D. Indexed Earnings |
1951 |
$3,600 |
|
10.89 |
|
1952 |
3,600 |
|
10.25 |
|
1953 |
3,600 |
|
9.71 |
|
1954 |
3,600 |
|
9.66 |
|
1955 |
4,200 |
|
9.23
|
|
1956 |
4,200 |
|
8.63 |
|
1957 |
4,200 |
|
8.37 |
|
1958 |
4,200 |
|
8.29 |
|
1959 |
4,800 |
|
7.90 |
|
1960 |
4,800 |
|
7.60 |
|
1961 |
4,800 |
|
7.46 |
|
1962 |
4,800 |
|
7.10 |
|
1963 |
4,800 |
|
6.93 |
|
1964 |
4,800 |
|
6.66 |
|
1965 |
4,800 |
|
6.54 |
|
1966 |
6,600 |
|
6.17 |
|
1967 |
6,600 |
|
5.84 |
|
1968 |
7,800 |
|
5.47 |
|
1969 |
7,800 |
|
5.17 |
|
1970 |
7,800 |
|
4.93 |
|
1971 |
7,800 |
|
4.69 |
|
1972 |
9,000 |
|
4.27 |
|
1973 |
10,800 |
|
4.02 |
|
1974 |
13,200 |
|
3.79 |
|
1975 |
14,100 |
|
3.53 |
|
1976 |
15,300 |
|
3.30 |
|
1977 |
16,500 |
|
3.12 |
|
1978 |
17,700 |
|
2.89 |
|
1979 |
22,900 |
|
2.65 |
|
1980 |
25,900 |
|
2.43 |
|
1981 |
29,700 |
|
2.21 |
|
1982 |
32,400 |
|
2.10 |
|
1983 |
35,700 |
|
2.00 |
|
1984 |
37,800 |
|
1.89 |
|
1985 |
39,600 |
|
1.81 |
|
1986 |
42,000 |
|
1.76 |
|
1987 |
43,800 |
|
1.65 |
|
1988 |
45,000 |
|
1.58 |
|
1989 |
48,000 |
|
1.52 |
|
1990 |
51,300 |
|
1.45 |
|
1991 |
53,400 |
|
1.40 |
|
1992 |
55,500 |
|
1.33 |
|
1993 |
57,600 |
|
1.32 |
|
1994 |
60,600 |
|
1.28 |
|
1995 |
61,200 |
|
1.23 |
|
1996 |
62,700 |
|
1.18 |
|
1997 |
65,400 |
|
1.11 |
|
1998 |
68,400 |
|
1.06 |
|
1999 |
72,600 |
|
1.00 |
|
2000 |
76,200 |
|
1.00 |
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[Return to worksheet]
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