Social Security Differs From SSA.Gov Estimate

Just created a My Social account and noticed that the government's current estimate of my SSA benefit is about 2% lower than ESPlanner. I'm assuming the difference is either due to inflation/cost of living assumptions, or some other assumption about the law going forward. I am 60. Can you possibly pinpoint possible reasons for differences? I checked that the earnings histories and future earnings matched. Thx


dan royer's picture

ESPlanner's Social Security benefit estimates are higher than SSA's because we use the Alternative II, Intermediate assumptions from the Trustees Report for real average wage growth after 2012. The average wage is used to index your past earnings in the calculation of benefits.

SSA assumes no increase in the average wage after 2012.

In short, SSA is purposefully low balling their estimate to guarantee that your actual benefit is never lower than their estimate. Assuming, as we do, real wage growth is the way to get the most accurate figure.

I thought it was something like that. It makes a difference in our plan so thanks for the detail. ESPlanner's approach seems better.

I understand ESPlanner's rationale above. Does that still apply if you've retired early and thus would have no wage growth in the future?

I am 51, retired, and plan to start taking Social Security benefits at age 70. My SSA estimated benefit is a double digit % lower than ESPlanner's. SSA indicates their estimates are in today's dollars, so I would think that would account for the inflation component.

It's national average wage growth, which is used to index your earnings, not your personal wage that matters.
So, yes Dan's explanation stll applies even if you take Social Security early.
The difference between ESPlanner's and SSA's benefit is greater the younger you are since there are more years of difference. Both estimates are in todays real dollars. The difference is not inflation, it's the national average wage.

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