Calculating Your Expected Social Security Income

There is a portion of the social security statement that is a constant source of misunderstanding – the projection portion at the top of page 2.

Projection of Benefits

If you’ll take a look at this portion of the statement, you’ll see a projection of your Social Security retirement benefits, at Full Retirement Age (whatever that is for you), at age 70, and at age 62.  Also listed are the amounts that you would receive for Disability Benefits, as well as amounts that your family would receive upon your death as survivors.  What gets missed for many folks is the part at the top which reads:

At your current earnings rate, if you continue working until…

With that short phrase comes a great deal of confusion and misunderstanding.  What this means is that, when you receive this document, assuming that you are something less than Full Retirement Age (FRA), the statement reflects a projection of your future earnings from now until those projected ages (62, FRA, and 70) – and those amounts provided are based upon that projection.

If, for example, you chose to stop working at age 62 and delay receiving benefits until FRA, the benefit that you’ll receive will likely be less than the amount shown on your statement… because you did not continue earning at your current rate to FRA, as the projection assumes.

Reduced Income

Another example is where you continue working, but your income has been reduced, due to layoff or other dramatic change in your employment.  With the jobs outlook being the way it has been over the past few years, it’s not hard to imagine a situation where this might be the case.

There are several calculators available on the Social Security website that can help you to get a clearer picture of your actual benefit if your projected earnings will be something different than what you’ve experienced up to the present (or actually, up to two years ago, since that’s all the more that is generally covered with the statement).

About the author

Jim Blankenship, CFP®, EA

Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP professional and has earned the Enrolled Agent designation, a designation that qualifies him as enrolled to practice before the IRS. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.

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  • Linda –

    Well, since it’s been less than 12 months since you started, you could voluntarily withdraw and pay back what you’ve received so far, and then file again later. You have to do this before 12 months is up, and you can only do this once (per recent changes – detailed in this article: SSA Revises Withdrawal Policy).

    The alternative is that, if you earn more than the limit of $14,160 then a portion of your benefit ($1 for each $2 over the limit) will be withheld, and you’ll get credit for that withheld portion later when you either are no longer earning above the limit or when you reach FRA.

    The reason your checks have been withheld could be due to the fact that the calculation is actually done on a monthly basis – $1,180 per month for 2011 – so if you’re earning more than that, SSA says it’s too much. Other than that, I’d say you should check with SSA to see what’s up with your checks (if you don’t do the voluntary withdrawal that I mentioned first).

    Hope this helps –


  • I am a retired teacher who started drawing at 62 (Sept. 2010). However, I went back to work in Jan., 2011. I called a SS office in “Timbuktu;” I was told that I could earn $14,400 while receiving SS. However, I haven’t received any SS checks since Jan. WHY?

    If I continue working and decide to start recollecting SS later …64-65…do I have to repay what I have received or is there an alternative?

    Thanks, Linda in MN

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