In 2011, the Social Security Administration (SSA) stopped the previous practice of sending out annual estimates of Social Security Benefits. However, there is an online calculator on Social Security’s web site which gives users a good picture of what their benefits could look like in retirement.
Getting an accurate estimate of the size of your social security check in later life is a critical step in planning and budgeting for retirement.
The SSA tool is tied to your actual earnings history. Once you identify yourself online, the calculator looks for your past annual earnings in the SSA database and uses those numbers to estimate your benefit. It allows you to type in an average salary for your remaining years of work – which is valuable if you expect your wages to jump sharply or if you plan to cut back to part-time work. In addition, the tool allows you to consider and run the numbers for various “stop work” ages. If you want to know what your benefit will be if you stop working at age 58 – or age 64 – just enter these into the calculator.
The tool has its limitations. If you are already collecting Social Security, you won’t be able to make use of it. Also, it does not calculate spousal benefits. However, for most people, the tool offers a reasonably realistic estimate of your social Security benefits.
– Mark S Gleason CPA