Here’s How Anyone Can Calculate Estimated Social Security Benefits

Blank Social Security checks run through a printer at the U.S. Treasury printing facility

Blank Social Security checks run through a printer at the U.S. Treasury printing facility. What will your Social Security benefits add up to? | William Thomas Cain/Getty Images

Retirement is just around the corner. Even if you’re in your 20s or 30s, you should be planning for your post-work life and saving accordingly. It can be hard, as there are other things that require your attention, such as mortgages, children, and student loans. But the reality is most of us aren’t going to be able to rely on the Social Security system alone to get through our golden years.

And because of that, you’ll need to know what to stash away for the future. That requires some tools.

Calculating your Social Security benefits

The process of calculating your benefits isn’t exactly straightforward. There are numerous factors and variables in the mix, and each individual’s eventual payout will be different from the next. If you plan on relying mostly or solely on Social Security after retiring, you don’t want to guess at what to expect. You need to have a very good idea of what your financial situation will look like.

In order to get there, you need to know what those factors and variables are that will determine how much you get. According to the Social Security Administration, the most important element in the calculation is your lifetime earnings. From there, a formula is applied:

“We adjust or ‘index’ your actual earnings to account for changes in average wages since the year the earnings were received. Then, Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most,” the SSA website said. “We apply a formula to these earnings and arrive at your basic benefit, or ‘primary insurance amount.’ This is how much you would receive at your full retirement age — 65 or older, depending on your date of birth.”

A few things that can change your benefits:

  • Signing up before full retirement age
  • Eligibility for cost-of-living benefits
  • Waiting past full retirement age (up to age 70)
  • Are or were a government worker with a pension

Now, on to the 10 tools that can help you get into the specifics. Which tool is best for you?

1. Determine what you’ll need with the Retirement Estimator

The Social Security Administration has a tool called the Retirement Estimator that will crank out an estimate based on your actual earnings history. Everyone has a record with the IRS and SSA, and by digging into that data, the estimator can give you a ballpark figure as to what you can expect. This isn’t available for everyone, however, as you’ll need to have enough Social Security credits to qualify for benefits.

But if you want to dig deeper, you can start using these calculators …

2. The SSA’s Quick Calculator

An Apple iPhone 6s displaying the calculator

An iPhone displays a calculator. | iStock.com/Jlende

In addition to the Retirement Estimator, the Social Security Administration also has calculators available for use. The first (and simplest) is the Quick Calculator, which will give you an estimate of your benefits based on your age and earnings history. This calculator doesn’t actually tap into your earnings record on file, and instead it just spits out a ballpark figure based on how old you are and what you’ve earned up to this point.

This can be a good starting point, but you’ll probably want a more accurate calculator.

3. The SSA’s Online Calculator

personal finance

A man crunches some numbers. | iStock.com

And, for a more accurate number you won’t even need to leave the Social Security Administration site. Another calculator, the more robust Online Calculator, will help you get a more accurate estimate based on the information at hand. To use it, you’ll need to get into your Social Security statement online, and enter your past earnings. Taking that data into account — the biggest difference being a more detailed earnings history — you’ll get an estimate.

What if you need even more detail?

4. Detailed Calculator

A couple digging deep into their finances

A couple dig deep into their finances. | iStock.com

If you require a more detailed and accurate estimate, use the Social Security Administration’s Detailed Calculator. This tool accesses your earnings record that is on file with the SSA. It’s a beefed-up version of the preceding two tools. And as a result, it aims to give you an even more locked-in estimate. If you’re relatively young, you’ll probably be fine using the Online Calculator or Retirement Estimator.

Next: If you don’t want to use tools provided by the SSA, there are plenty of other options out there.

5. Other calculators: Fidelity

The initial question on Fidelity's social security calculator

The initial question on Fidelity’s Social Security calculator | Fidelity

Fidelity Investments, one of the more popular investment chains, also has a calculator you can use to start planning for retirement. It’ll ask you a series of questions and help you move through the motions from there. It’s designed for people between the ages of 40 and 69. If you’re under 40, you can use a similar tool to get a “retirement score” to help you determine your next steps.

6. AARP’s calculator

AARP

The AARP logo | AARP

AARP has a Social Security calculator to help estimate your benefits. This tool is particularly useful for figuring out the income you’ll receive if you decide to retire at different ages. For example, if you sign up at 62, your benefits will be different than if you sign up at 65 or wait until 70. This is a great option if you’re nearing retirement age.

7. The CFPB’s Planning for Retirement tool

Initiating the CFPB's retirement tool

Initiating the Consumer Financial Protection Bureau’s retirement tool | Consumer Financial Protection Bureau

Another government tool, the Consumer Financial Protection Bureau has a Planning for Retirement feature that works in a similar fashion to the other tools on our list. It’ll give you a rough estimate of what you can expect in terms of monthly or annual benefits. And like AARP’s tool, it will show you what you stand to gain (or lose) by signing up at different ages between 62 and 70.

8. Bankrate’s Social Security Calculator

Bankrate's Social Security Calculator

Bankrate’s Social Security Calculator | Bankrate

Yet another tool is the Social Security Calculator available from Bankrate. Like the others, you can calculate and estimate your benefits by entering your age, target retirement age, annual income, and expected increases in income. You’ll get both monthly and annual estimates. The tool itself is actually licensed from another company, Dinkytown, which has many other tools and calculators available on its site.

9. Boston College’s Center for Retirement Research

The Center for Retirement Research's logo

The Center for Retirement Research’s logo | Boston College

If you want to trust the eggheads at a major university to give you a good benefits estimate, you should try the Target Your Retirement tool available from the Center for Retirement Research at Boston College. Again, you’ll input your information, and the program will provide some numbers. This tool is a bit more sophisticated than the others, as it accounts for things, such as lifestyle changes and other retirement savings, to give you an idea of what you need to do.

10. Tools you’ll have to pay for

banking and people concept

Money in a wallet | iStock.com/dolgachov

So far, all of the tools and calculators we’ve listed are free of charge. But there are others out there that require a payment. These tools, as you might expect, offer features the others don’t. And they can help you really dig into the details of what you can expect and what you’ll need to do to plan for retirement. One example is Maximize My Social Security, which is $40 for a household license.

Potential pitfalls to Social Security calculators and tools

husband and wife working on finances with calculator and laptop

A couple work on their finances. | iStock.com/Tomwang112

It’s important to know what to expect after retirement. That means knowing what resources you have on hand and what to expect from Social Security. But these tools are not foolproof. You can use them incorrectly or forget about important variables. Some of them just aren’t robust enough to take many things into account. For these reasons, you don’t want to rely solely on these tools to plan your future.

But again, these are useful tools. They’ll give you an idea of what you’re facing. But the world is a complicated place, and things change. That said, use them responsibly.

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