Why are my estimated Social Security retirement benefits declining?

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Today’s Social Security column addresses questions about why Social Security’s estimates of future retirement benefits may fluctuate, calling for a benefit rate to be recalculated and how rates might increase even after 70 year. Larry Kotlikoff is professor of economics at Boston University and founder and president of Economic Security Planning, Inc.

See more Ask Larry answers here.

Do you have social security questions yourself that you would like to answer? Ask Larry about Social Security here.


Why are my estimated Social Security retirement benefits declining?

Hello Larry, My plan is to defer my Social Security retirement benefits until age 70. I turned 67 in October and retired just before the pandemic hit in early 2020. My estimated benefits are dropping. Why is it?

How do I freeze my winning record? I want my estimated benefits to be based on my earnings over the past five years. Would it be possible to file and suspend benefits in order to freeze my earnings record? Thanks, Daniel

Hello Daniel, Your estimated benefits may have gone down, but that doesn’t mean your actual benefit rate has. I’m assuming your previous estimated benefit rate was based in part on expected future earnings that didn’t materialize because you stopped working.

You can’t freeze your earnings record, and it wouldn’t make any difference to your benefit rate if you could. And applying for and suspending your benefits would not result in a higher benefit rate than if you simply waited until age 70 to claim your benefits.

All social security retirement benefit rates are calculated on the basis of an average of the person’s top 35 years of income covered by social security, indexed to wages, and not over five or 10 years, which are common misconceptions.

Your benefit rate won’t go down because you’ve stopped working, it just won’t go up like you’ve continued to work and earned enough to replace one or more of your last 35 highest earning years used to determine your actual benefits rate. You may consider using my company’s software – Maximize My Social Security or MaxiFi Planner – to fully analyze your options.

It will accurately calculate future benefit rates based on past and current income as well as your best estimate of future income so you can make informed decisions about your best strategy to maximize your benefits and avoid leaving money on the table. table without knowing it. Social Security calculators provided by other companies or nonprofits may provide suitable suggestions if they have been constructed with extreme care. Best, Larry


Can I request that my service be recalculated?

Hi Larry, My Social Security rate was calculated in a rush due to an injury and I was placed on SSDI. I suspect it was not calculated correctly. Can I request that it be recalculated? How do I know it has been calculated correctly? Thanks, Eva

Hello Evan, Virtually all Social Security retirement and disability benefits (SSDI) are calculated using Social Security’s automated computer system. So, unless there is some missing income in your income history, it is extremely unlikely that your benefit rate has been miscalculated.

However, if you believe there is a lack of income on your file, or if you have some other reason to believe that your benefit rate has been miscalculated, then you can file an appeal or manual recalculation request.

Appeal requests should normally be made within 60 days of the decision you are appealing. If you’ve passed that time, you can submit a Form SSA-795 to Social Security asking for your benefit rate to be recalculated and listing the reasons you think the calculation is wrong.

You should also submit any relevant evidence (for example, proof of income that you feel has not been considered, etc.) that you want them to consider. Best, Larry


Will my benefit rate increase now that I’m 75 and ready to retire?

Hi Larry, I took Social Security early retirement benefits at 62 but continued to work part time. I’m now 75 and ready to retire from a part-time job that was 30 hours a week. Will my Social Security increase when I do? Thank you Marie

Hi Marie, Your benefit rate will not increase as a result of your retirement, but it could potentially increase if you’ve earned enough recently. Social Security retirement benefits are based on an average of the highest 35 years of a person’s social security covered earnings indexed to wages.

Your additional earning years would only increase your benefit rate if they are greater than one or more of the 35 years currently used to calculate your benefit rate.

Social Security automatically recalculates benefit rates to take into account any additional Social Security covered income that a person produces after applying for benefits. If your earnings since applying for benefits have been high enough to increase your benefit rate, then your benefit amount should already have been increased.

But Social Security almost certainly hasn’t recalculated benefits to take into account income for 2020 and 2021 yet, so it’s at least possible that you are still entitled to an increase based on your income in those years. Best, Larry



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