Social Security Statements and Where to Find Your Estimated Benefits

Two people ask about Social Security Statements and where to find estimated benefits.

“Two people posed similar questions about Social Security Statements. One asked, "I do not have a Social Security Statement, so how do I get an estimate of my Primary Insurance Amount or PIA?" The other asked, "Each year, I review my Social Security Statement online to verify my earnings record. I know the benefits are estimated based on the assumption that I will continue to earn the same in future years that I did in the past couple of years. Is there a website or formula I can use to calculate my estimated benefits if I decide to quit working or earn substantially less than I am currently earning? I am now 58 years old."

Well, both of you are looking for similar information.

The first one says, "I don't have a Social Security Statement to refer to." You should obtain one whether you're going to use the calculations done by Social Security, or you're going to calculate them on your own, maybe using the resources I'm going to share with the second person. In any case, you're going to need a copy of your earnings record.

What you're asking about is your PIA, or your Primary Insurance Amount, which is your retirement benefit at your full retirement age. It's determined mostly by your earnings record as the key input, so you've got to have that.

Unless you have a separate copy of your earnings record, you're going to need to access it, which you can do at www.ssa.gov, the Social Security website. One option is to set up a My Social Security account and access your records there. Or you can get a copy in the mail in four to six weeks by filling out and submitting Form SSA-7004, "Request For Social Security Statement." Another option is to go into an office and have them print out your earnings record and the estimates for your PIA. You can call 1-800-772-1213 for further information.

Once you have your earnings record, both of you are at the same place.

Now, there are two routes that either one of you can take. You can trust the estimate Social Security has for your PIA based on its default assumptions. (Social Security assumes you will continue to earn on average what you've been making the last two years, all the way until you claim your benefit.)

But maybe you have other plans. Maybe you want to work fewer hours or change to a less stressful job and are ready to take a cut in salary. Or maybe you want to quit working altogether. Whatever changes you have in mind, they’ll have an impact on your Social Security benefits.

When you look at your estimated benefit, you realize that Social Security is assuming something very different than what you intend. So, to help you make any decisions, you'll want to calculate your benefit more precisely, based on what you really intend to do regarding your work moving forward.

Social Security does have its own tool where you can enter some of this information, but it's very clunky and a bit difficult to find on their website. I'm not a big fan of it; in my experience, it just isn't very user friendly.

Most likely, you’d like to be able to enter your earnings record from the past and enter exactly what you estimate future earnings to be – along with your intended age of claiming – and see the results. A third-party website or software would be best for that. And a number of them are available.

I'll share what we use since it's available at retail as well. We have the advisory subscription, and we use it to crunch numbers when we're estimating Social Security in-house for our clients. But you can own it for $40 for a year. You don't get access forever, but you should be able to run all the hypothetical estimates you want in a year. And its pretty user friendly. If you go to MaximizeMySocialSecurity.com, you'll see an Annual Household License listed for $40.

I like it because it's pretty straightforward, it's at a relatively low cost, it gives you some great reports, and it will handle practically every Social Security scenario you can come up with. Say you're married and have spousal benefits to worry about. Or say you have dependents to consider. All scenarios are covered, except for one we found they couldn't deal with. (But it was a very rare scenario, and too convoluted to even try to explain.) Just know that every other scenario we've run into, it's been able to handle just fine.

You can look first at the default Social Security estimates, and then override them to get a prediction for what your benefit might be, later on, all the way to age 70. You can play around with all the "what ifs" you can think of. "What if I take a job that pays half? Or a quarter?" "What if I stop working completely?" You get an immediate view of the effects on your ultimate retirement benefit as a result of changing those inputs. Once again, that's MaximizeMySocialSecurity.com.

Lots of other websites offer products that can do what you're looking to do. I'm sharing this one because it's the one we use, and I think that it would handle what both of you are asking.