New Social Security Benefits Calculator

On July 23, 2008, the Social Security Administration unveiled its new Retirement Estimator which "produces estimates that are based on your actual Social Security earnings record." A link to it is featured on SSA's Home Page.

According to the SSA's description, this new Benefits Calculator:

• Provides an estimate of your retirement benefits comparable to the estimate you receive on your Social Security Statement each year, and

• Lets you create additional "what if" retirement scenarios based on current law.

In the past, SSA offered some form of online benefit projection calculators since at least Spring, 2000. See: "SSA Unveils Online Social Security Benefits Calculator" (04/12/2000) by Karen Stevenson posted by ElderWeb. Previously, three versions were offered:

A "Quick" version computes future benefits from current earnings, by making an assumption that earnings will stay at that level long enough to qualify for benefits.

An "Online" version allows the user to input actual historical salary amounts for each year for a more accurate estimate.

A "Detailed" version allows the user to download a program which can make the most accurate predictions, including disability and death benefits.

Because of privacy concerns, those prior SSA planners were not linked to the active SSA databases, and therefore required users to input their own salary information used for calculations. For many, the effort to input data crippled the usefulness of the calculator, or made its use just too much trouble.

For "hip shot" calculations, vendors also have provided online calculators for generic social security benefit projections. See, for example, the Social Security Benefits Financial Calculator still offered online by Commerce Clearinghouse.

Now, the new SSA Retirement Estimator will perform its calculations based on SSA's data drawn from an actual earnings history, without a need for numerical input.

To utilize the new SSA Retirement Estimator, first you must authenticate yourself online as a social security member with an earnings history. And you must not block the website's interaction with your computer, that is, JavaScript must be enabled to interact with the SSA website.

Before you enter data, you are met with a stern warning:

Acknowledgement For Online Services

IMPORTANT: You can use this website to gain access to your personal information. If you are acting on behalf of another person, or if you are a Representative Payee, you cannot use this online service and should contact a Social Security representative.

Any person who knowingly and willingly makes any representation

1. that is false to obtain information from Social Security records, and/or
2. that is intended to deceive the Social Security Administration as to the true identity of the individual,

could be punished by a fine or imprisonment, or both. The OMB control number for this form is 0960-0596; expiration date 09/30/2009.

I have read and agreed to the above statement. I am the individual whose personal information I am requesting.

Once you agree, then you can enter the required data for authentication:

• Your full name (first name, middle initial, & last name, plus suffix if any, and any other last name used)
• Your Social Security Number
• Your date of birth
• Your place of birth (state, territory, or foreign country)
• Your mother's maiden name

Once authenticated, you can enter your last year's earnings, so that projections can be calculated based on your earnings record and contributions.

SSA cautions about the projections, however:

Retirement estimates are just that, estimates. They will vary slightly from the actual benefit you may receive in the future because:

• Your Social Security earnings record is constantly being updated;
• Our calculators use different parameters and assumptions (e.g., different stop work ages, future earnings projections, etc.); and
• Your actual future benefit will be adjusted for inflation.

This benefits calculator is not intended for use by those who are already covered by Medicare, or currently receive benefits based on earnings.

This benefits calculator is intended for use by future social security recipients if:

• You are not currently receiving benefits on your own Social Security record;
• You are not a Medicare beneficiary;
• You have enough Social Security credits at this time to qualify for benefits; and
• You are not eligible for a Pension Based on Work Not Covered By Social Security.

I used the calculator, which then determined a monthly benefit level for me if I "stop working and start receiving Social Security benefits" at three different ages:

• At age 62 (early retirement)
• At age 66 (full retirement)
• At age 70

The results were based upon certain standard assumptions:

• We estimate your benefits using your average earnings over your working lifetime.
  
• We also assume that as you continue to work you will make about the same as you entered for last year's earnings.

Then there was a disclaimer about the estimates, which "are similar to the estimates you receive in your annual Social Security Statement: "These estimates do not include Medicare premiums or other amounts that may be deducted from your benefit."

The Retirement Estimator is a useful planning tool that allows immediate, personalized projections for potential Social Security retirement benefits.

Again, the new online calculator is available at: www.socialsecurity.gov/estimator.