Читать книгу Personal Finance After 50 For Dummies - Eric Tyson - Страница 65
Assumptions: Discovering how your benefits are estimated
ОглавлениеAlong with your benefits estimates, the SSA also discloses the assumptions used to come up with your numbers and some important caveats. You should understand the assumptions behind the estimates we talk about in the preceding section. Why? These are projections, and depending on your earnings in the years ahead, your expected benefits may change. Here’s what the SSA says:
Generally, the older you are and the closer you are to retirement, the more accurate the retirement estimates will be because they are based on a longer work history with fewer uncertainties such as earnings fluctuations and future law changes. We encourage you to use our online Retirement Estimator to obtain immediate and personalized benefit estimates.
If you stop and consider this assumption, it does make sense and is true of about any forecast or estimate. The further into the future you try to project something, the more likely it is that the estimates may be off base.
To understand what could throw off future estimates, keep the following in mind as you dig a little deeper into the SSA’s assumptions:
If you have enough work credits, we estimated your benefit amounts using your average earnings over your working lifetime. For 2020 and later (up to retirement age), we assumed you'll continue to work and make about the same as you did in 2018 or 2019. We also included credits we assumed you earned last year and this year.
We can’t provide your actual benefit amount until you apply for benefits. And that amount may differ from the estimates shown below because:Your earnings may increase or decrease in the future.Your actual benefits will be adjusted for cost-of-living increases.Your estimated benefits are based on current law. The law governing benefit amounts may change. Congress has made changes to the law in the past and can do so at any time.Your benefit amount may be affected by military service, railroad employment, or pensions earned through work on which you did not pay Social Security tax.
In other words, the SSA assumes that your future earnings will annually be about the same as your earnings in the most recent couple of years. Therefore, as their own cautions highlight, if you expect your future work earnings to change from your most recent years’ employment earnings, your expected Social Security retirement benefits also will change.
Don’t get hung up over expected cost-of-living increases. When we walk you through the retirement number crunching later in this chapter, these increases are incorporated into the analysis. The third point about future benefit law changes is worth considering, so we cover that in detail in Chapter 10.
If you want to delve into different scenarios for your Social Security benefits, use the SSA’s online Retirement Estimator at www.ssa.gov/benefits/retirement/estimator.html
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