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How Your Retirement Benefit Is FiguredSSA Publication No. 05-10070, March 1997 |
As you make plans for your future, one of the questions you'll probably ask is, "How much will I get from Social Security?" There are several ways you can find out. Social Security can give you a free estimate of what your retirement benefit will be. You can obtain the request form by calling Social Security and asking for a Request for Earnings and Benefit Estimate Statement. If you have access to the Internet, you can obtain the request form, an online estimate, or calculate your own retirement benefit using the Internet program ANYPIA. These services are available at the address, http://www.ssa.gov. Even with an estimate, 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 age 65. |
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Factors That Can Raise Or Lower Your Retirement BenefitThe 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 age 65 You can begin to receive Social Security benefits at age 62, but at a reduced rate. Your benefit is reduced by five-ninths of one percent for each month you get benefits before age 65. This amounts to approximately a 20% reduction at age 62. The closer you are to age 65 when benefits start, the smaller the reduction. For example, the reduction is 13-1/3 percent at age 63 and 6-2/3 percent at age 64. 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 age 65 A person may continue working past age 65 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 age 65 but not receiving 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 Social Security and ask
for a copy of A Pension From Work Not Covered
By Social Security (Publication No. 05-10045). |
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Any Questions?You can get recorded information or a benefit estimate request form 24 hours a day, including weekends and holidays, by calling Social Security's toll-free number, 1-800-772-1213. You can speak to a service representative between the hours of 7 a.m. and 7 p.m. on business days. Whenever you call, have your Social Security number handy. People who are deaf or hard of hearing may call our toll-free "TTY" number, 1-800-325-0778, between 7 a.m. and 7 p.m. on business days. You can also reach us on the Internet. Type http://www.ssa.gov
to access Social Security information. |
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Estimating Your Social Security Retirement BenefitThis worksheet shows how to estimate the Social Security monthly retirement benefit you would be eligible for at age 62 if you were born in 1935. It also allows you to estimate what you would receive at age 65, excluding any cost-of-living adjustments for which you may be eligible. If you continue working until age 65, your additional earnings could increase your benefit amount.
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