In 2004, Urban Institute economists C. Eugene Steuerle and Adam Carasso created a Web based Social Security benefits calculator. Using this calculator it is possible to estimate net Social Security benefits (i.e., estimated lifetime benefits minus estimated lifetime FICA taxes paid) for different types of recipients.
In the book Democrats and Republicans – Rhetoric and Reality Joseph Fried used the calculator to create graphical depictions of the estimated net benefits of men and women who were at different wage levels, single and married (with stay at home spouses), and retiring in different years.
These graphs vividly show that generalizations about Social Security benefits may be of little predictive value for any given worker, due to the wide disparity of net benefits for people at different income levels and in different demographic groups.
For example, the graph below (Figure 168) shows the impact of wage level and retirement date on a male worker. As income goes up, net benefits get smaller – even negative.
The amount of social security income a retiree will receive at full retirement age is based on the top 35 years of earnings.
The benefit is then reduced or increased according to when you apply. Retirees can apply for social security benefits when they have attained age 60.
Unfortunately, by collecting social security income early a retiree settles for a reduced benefit. One way a retiree can maximize their social security income is by simply postponing the application.
Social security benefits at age 62 are roughly 75% of what they would be at Full Retirement age and increase by roughly 8% each year that they are delayed up to the maximum benefit at age 70.
In the book Democrats and Republicans – Rhetoric and Reality Joseph Fried used the calculator to create graphical depictions of the estimated net benefits of men and women who were at different wage levels, single and married (with stay at home spouses), and retiring in different years.
These graphs vividly show that generalizations about Social Security benefits may be of little predictive value for any given worker, due to the wide disparity of net benefits for people at different income levels and in different demographic groups.
For example, the graph below (Figure 168) shows the impact of wage level and retirement date on a male worker. As income goes up, net benefits get smaller – even negative.
The amount of social security income a retiree will receive at full retirement age is based on the top 35 years of earnings.
The benefit is then reduced or increased according to when you apply. Retirees can apply for social security benefits when they have attained age 60.
Unfortunately, by collecting social security income early a retiree settles for a reduced benefit. One way a retiree can maximize their social security income is by simply postponing the application.
Social security benefits at age 62 are roughly 75% of what they would be at Full Retirement age and increase by roughly 8% each year that they are delayed up to the maximum benefit at age 70.
from SOCIAL SECURITY BENEFITS EXPLAINED - Blog http://ift.tt/1NPdne5
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