Confused about social security pension at age 62. The last statement I got from the govt

[valerief]

is reducing my pension, not increasing it.

To explain, I'm not 62 yet and still employed (for now). In Feb. 2010, I got a statement from the govt saying if I started collecting at age 62, I'd get X amt. It included my earnings through 2008. In Feb. 2011, I got another statement and it included my earnings through 2009. Those 2009 earnings were the max in my working career through 2009. That statement said if I started collecting at age 62, I'd get Y amt. I expected Y amt to be higher than X amt on my previous year's statement, but it was less by about $20 or so!

So now I'm wondering if each year my pension will go down and be significantly lower by the time I reach 62.

Does anyone know why this happens?

Thanks.

On edit: BTW, it showed a reduction in my pension between the two statements if I collected SS after 65, too.

[Ruby the Liberal]

1. I would call the SS office and ask them

Good for you for keeping those statements!

[valerief]

3. You mean everyone doesn't keep them???

I guess I will call them. I always thought the more you earned, the more SS you'd collect. And I always thought it calculated off your highest quarter. Maybe it used to, but it doesn't look like it does that now per the SS web site.

[Ruby the Liberal]

9. I have to admit, I have tossed mine

I am in my early 40s though. I figured I would start caring in another 15 years (if it is even still around then).

My understanding is that it is calculated off the average of the top 10 quarters, but I could be very mistaken. Regardless, it should NOT be going down - especially as you are still working and still contributing to the system.

[valerief]

14. That's what I thought. It looks like it was going up every year from the statements I have

(back to 1998), but this year it went down. There was no lapse in employment and my earnings went up, as it does each year. I don't understand why it would go down.

Maybe they're assuming I'll never work again. They're probably right. When I lose this job (after almost 20 years), I'll be hard pressed to find another mainframe programming job. In America.

[NNN0LHI]

2. Has your income when down since 2008?

[valerief]

4. Nope. Keeps going up. Not a lot, but up, not down. nt

[Cleita]

5. I took it at 62 because I had to take care of my

husband who was suffering from end stage renal disease. I get less per month than I would have if I retired at 65, but since I will probably collect for three extra years, it seems it averages out. I don't know about the new tinkering that they are doing with it if it's even less.

[valerief]

7. I figure I'll have to do 62, because who'll hire me? nt

[madrchsod]

17. i did that...my ss pays the mortgage

[JoePhilly]

6. I'm not positive, but I think those statements give you an ESTIMATE.

I've saved all of mine, but I am not looking at them at the moment, but I think they give you an estimate.

[valerief]

10. Yes, but what changed in the estimates? I've been making several thousand

dollars more each year. Did they estimate I'd be getting a bigger raise? I just wondered what changed.

I wonder if it's got something to do with the tax holiday thingy.

[drpepper67]

12. It's an estimate based on averages and projected averages and the government is involved.

[Warren Stupidity]

21. The COLA was zero for two years.

And the original estimate was based on a non-zero COLA.

[valerief]

22. Excellent point! I hadn't considered that. Thanks. That must be the reason. nt

[Snotcicles]

8. I just looked at several of mine they have not been consistent at all.nt

[valerief]

11. Well, if you're making more money than the last and you've been

steadily employed, wouldn't you expect the pension amount to go up instead of down?

[Snotcicles]

13. Yes I would. nt

[elfin]

15. Make a personal appointment with your

local (or nearest) SS office. It does take an inordinate amount of phone time, but worth it, to make that kind of appointment.

I and many of my friends have found that this remains the one agency looking out for its clients (you).

The personal meeting does make some difference as the agent has carved out some time just for you.

In my case, as a widow, I received excellent advice, which jibed with the initial responses from friends, AND he found nearly $1000 more for me due to something called "death after disability", of which I had never heard, nor even suspected might be in order. He gave me explicit instructions for the records I needed to amass and then expedited the payment.

I did take the more immediate and reduced benefits, which fit best with my individual situation. Good luck.

I don't think the Rethugs have completely eviscerated this agency yet, despite trying year after year.

[valerief]

16. Thanks. Good advice. I'll put that on my to do list when I lose

my job. It'll be here soon, too.

[madrchsod]

18. best customer service in the world....

every time i`ve called or gone to the office the folks are just plain nice.

[spooky3]

19. one possible explanation--though you may have already checked this

For unknown reasons, probably just human error, one year I got a SS statement that indicated that they expected my future earnings to be zero, which obviously made my future expected benefit decline. That was not what they had done the prior year. I wrote and asked them to recalculate the estimate based on the estimate of future earnings that I provided to them. They did correct it, and the following year, they followed the corrected practice.

[valerief]

20. Yes, I considered that they may expect me to never work again.

I'll need to check with the SS office one of these days. I'm still far enough away from 62 to not need to do it just yet.

Did they give you a reason why they expected you to not have future earnings? I'm wondering if it's the same with me.

[WCGreen]

23. It might be due to an increase in Medicare figured into the amount...

[Obamanaut]

24. If the net amount is different , it might be due to some of the tax changes

back and forth the last couple of years - 'making work pay' and so forth.

[valerief]

25. Someone here said it could be that the 2010 stmt included COLA

increases that never materialized the last two years. That makes sense. I'm not familiar with Making Work Pay. Gotta look that up.

On edit:

Found this here http://www.irs.gov/newsroom/article/0,,id=204447,00.html.
-----------------------
n 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act of 2009 provided a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns. Most wage earners benefited from larger paychecks in 2009 and 2010 as a result of the changes made to the federal income tax withholding tables to implement the Making Work Pay tax credit.

To claim the credit, most workers must file Schedule M, Making Work Pay Tax Credit (1040A or 1040), with their tax return. For more information, see Claim the Making Work Pay Tax Credit on Your Tax Return with Schedule M.
------------------------

I never filed a Schedule M.