SS calculations

[LivingAlmostLarge]

How does it work for SS if you stop working before 62? I know you need 10 years or 40 working quarters and they average it out. How does all the zeros affect your SS calculations? Say you retire at 55 and have zeros for 7 more years?

[humandraydel]

The SSA website has some good calculators. Making 80k per year I changed my quitting age from 62 to 50 and my benefit went from $1660 to $1500.

[Like2Plan]

As humandraydel noted, there is a SSA calculator online:
SSA Benefits Calculator

If you are quite a few years away from claiming a SSA benefit, you will have to make some guesses about your future income and inflation rates.

SS calculates your Primary Insurance Amount (PIA) to your full retirement age (FRA) based on your high 35 years. Then, there will be a reduction based on the target retirement date if you claim before FRA. Table for Benefit Reduction for Early Retirement

[cardtrick]

Looks like the zeros don't have much of an impact on SS income.

If i retired at 65 while contributing close to the max to SS, I'd get $1800 (today's dollars) per month at retirement.

If I just put in 40 quarters of work and retire, I'd still get $900 per month at retirement.

[humandraydel]

Looks like the zeros don't have much of an impact on SS income.

If i retired at 65 while contributing close to the max to SS, I'd get $1800 (today's dollars) per month at retirement.

If I just put in 40 quarters of work and retire, I'd still get $900 per month at retirement.

EDIT: Nevermind - I played around and there doesn't appear to be a floor - making $20k per year for 10 years and then quitting results in $322 monthly payment.

I suspect there is just some floor (close to the poverty level?) and you would also get $900 per month if you work at a minimum wage job for 20-30 years?

[Like2Plan]

I suspect there is just some floor (close to the poverty level?) and you would also get $900 per month if you work at a minimum wage job for 20-30 years?

Yes--you are correct. (Probably pretty close as long as you get 35 years )
Here is a link to the social security web site Your Retirement Benefit: How it is figured

There is a work sheet where you can calculate your primary insurance amount (or you could design a spread sheet with the formulas).

Basically--you find your average high 35.
Next, you apply a formula to find your average indexed monthly earnings
Then, there are 3 formulas--you receive a higher percentage of earnings for the first $816 (90%). For amounts between 817-4917 it is 32%. Anything above that is 15%.

a.Multiply the first $816 in Step 4 by 90%.
$_________
b. Multiply the amount in Step 4 over $816 and
less than or equal to $4,917 by 32%. $_________
c. Multiply the amount in Step 4 over $4,917 by 15%.

[Like2Plan]

EDIT: Nevermind - I played around and there doesn't appear to be a floor - making $20k per year for 10 years and then quitting results in $322 monthly payment.

Whoops--I just noticed the 20-30 years part. I think the 0's for 15 years in this case would have a have a big impact.