How to Estimate Social Security Benefits Made Easy

How does the social security administration estimate what your monthly benefits? How do they adjust prior earnings for inflation? You can look up your earnings history and monthly benefit estimate at the social security site, but how do they come up with their numbers? How do they determine the cost of living adjustments? How much difference is there in taking social security at age 62 vs full retirement age? What are some considerations in that decision?

How social security uses your highest 35 inflation adjusted earnings years to figure benefit

How does social security adjust your prior earnings for inflation?

What is the breakeven point in taking benefits at 62 (early) vs 67 or 70?

What are the bend points to determine how much your monthly benefit will be at full retirement age?

The CPI-W index used to determine COLA or cost of living adjustments

How to find out what your earnings history and benefit estimated monthly number is

Mentioned in this Episode:

Bend points in social security used to calculate monthly estimated check https://www.ssa.gov/OACT/COLA/piaformula.html

CPI for Urban Wage Earners and Clerical Workers https://www.ssa.gov/OACT/STATS/cpiw.html

What is the amount up to you pay social security taxes on? https://www.ssa.gov/OACT/COLA/cbb.html

National Wage Index for Social Security (to inflation adjust your past earnings) https://www.ssa.gov/OACT/COLA/AWI.html

Create My Social Security account and see what your earnings history and benefit estimation is https://www.ssa.gov/myaccount/

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