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| Getting Social Security Benefit Estimates |
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| Whether you're retiring soon or have years of work ahead of you, the Social Security Administration offers tools to help you get estimates of your Social Security benefit. Here is information on how you can get such estimates. |
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| Calculators on the Internet |
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| On the Social Security Administration Web site (www.ssa.gov), you can plan for retirement by calculating your future Social Security benefits. |
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| The site offers three benefit calculators-"Quick," "Online," and "Detailed." The more information the calculator requires, the more accurate the result will be: |
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Just input your age and this year's earnings to get estimated monthly benefits. |
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You input your date of birth and complete earnings history |
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This calculator gives you the most precise estimates. You'll need to download it onto your computer. |
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| These calculators are part of the Social Security Retirement Planner, also on the Web site, which not only provides valuable information but also guides you step by step through the retirement process. All this information makes it easier to factor in Social Security benefits as part of your retirement planning. |
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| Social Security Statement |
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| To help with retirement planning, the Social Security Administration offers you a personalized Social Security Statement. The statement provides estimates of the benefit you may receive. |
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| If you are 25 or older and not already receiving monthly Social Security benefits, you will automatically receive an annual statement about three months before your birthday. If you've already requested and received a statement within the last 12 months, you probably won't receive your annual statement this time around. You can also request a statement online at www.ssa.gov/mystatement. |
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| Your four-page statement will show estimates of the retirement, disability, and survivors' benefits that you and your family could be eligible to receive. It also includes a year-by-year account of your lifetime earnings in an easy-to-read chart. The information will help you answer the following questions: |
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How much more will you need to save in order to cover retirement living expenses? |
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Do you have enough insurance and other assets to protect your dependents should you die or become disabled? |
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| If you're married, you and your spouse should consider these issues jointly – especially if you both work and you depend on the double income to support your lifestyle. |
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| Check your statement to make sure that all the information is accurate, because these records have a direct bearing on your Social Security benefits. Contact your employer if: |
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| Your name or Social Security number on your Social Security card does not match the corresponding information on your pay stub. |
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| Contact Social Security if: |
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Your Social Security Statement shows missing or incorrect earnings that occurred while you were working for another employer (or working for more than one employer). |
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Your name or Social Security number on the Social Security Statement is incorrect. |
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You do not receive your annual Social Security Statement by your birth month and have not requested a statement on your own during the past 12 months. |
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Will Social Security be here for you? |
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According to the Social Security Administration, the answer is yes – but not without a few changes. Under the status quo, the Social Security trust funds, which supplement taxes as a source of benefit payments, will be exhausted by 2041. At that point, Social Security would be able to pay only about 73 percent of the benefits owed. Fortunately, there is a growing consensus about the need to make appropriate changes in Social Security. While the precise shape of those changes is still unclear, the Administration is confident that you can count on receiving benefits when you retire. |
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| How Much Income Will I Receive from Social Security During my Retirement? |
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| It depends on several factors: |
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| This relates to the concept of full retirement age (FRA) – and your FRA depends on your birth date. For people born before 1938, the FRA is age 65. The later you were born, the later your FRA will be. |
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| If you start receiving benefits when you reach your FRA, you'll receive the full amount of Social Security to which you're entitled. If you take your benefit early, it will be lower, depending on how early you elected to take it. (The earliest you can elect to take your benefit is age 62.) Conversely, if you delay retirement past your FRA, you'll receive higher benefits when you do retire. |
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| If you start collecting Social Security benefits before your FRA and keep earning income, you will lose $1 in benefits for every $2 you earn above $11,280 in 2002. |
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| The more money you make while employed, the smaller the percentage of your income that Social Security will replace. For instance, people who make $35,000 in the year before retirement will have 40 percent of their income replaced by Social Security. In any event, the maximum Social Security payment a retiree can receive in 2002 at age 65 is $1,660 per month. |
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Contact the Social Security Administration in the way that's most convenient for you: |
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Call or visit your local Social Security office (check the phone book under Government Listings). |
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Call the national toll-free number at (800) 772-1213 (available weekdays from 7 a.m. to 7 p.m. Eastern time). |
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Visit the Social Security Web site at www.ssa.gov. |
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| If your modified adjusted gross income, plus one-half of the amount of Social Security benefits you get during the year goes over a "base amount" (defined below), your gross income must include the lesser of: |
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50% of the excess of your income over the base amount, or |
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50% of the Social Security benefits you received during the year. |
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| If your modified adjusted gross income, plus one-half of the Social Security benefits you received during the year goes over the "adjusted base amount" (defined below), your gross income must include the lesser of: |
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85% of the Social Security benefits you received during the year, or |
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the sum of 85% of such excess, plus the smaller of: |
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the amount that was includable under pre-existing law, or |
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$4,500 in the case of a single taxpayer, or $6,000 in the case of a married taxpayer filing jointly. |
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| Modified adjusted gross income is the taxpayer's adjusted gross income (disregarding the foreign income and savings bond exclusions) plus any tax exempt interest received or earned during the year. |
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$32,000 for married taxpayers filing jointly |
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$25,000 for unmarried taxpayers |
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-0- for married taxpayers filing separately who did not live apart for the entire taxable year |
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$44,000 for married taxpayers filing jointly |
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$34,000 for unmarried taxpayers |
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-0- for married taxpayers filing separately who did not live apart for the entire taxable year. |
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Example:*
George White is single and files Form 1040 for 2001. He received the following income in 2001: |
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Fully taxable pension
Wages from part-time job
Interest income
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$18,600
$9,400
$990
$28,990 |
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| George also received net Social Security benefits of $5,980 during 2001. To figure his taxable benefits, George completes the Social Security and Equivalent Railroad Retirement Benefits worksheet. After completing the form, he finds that the taxable amount of his Social Security benefits is $2,990. On line 20a of his Form 1040, George enters his net benefits of $5,980. On line 20b, he enters his taxable part of $2,990. |
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| *Example from IRS Publication 17 |
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