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National Average Wage Index, or if you were born in 1960, you're fucked.

  1. #1
    Lifer oVTo's Avatar
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    National Average Wage Index, or if you were born in 1960, you're fucked.


    I've read a couple articles on this and checked out the Social Security Administration site (https://www.ssa.gov/OACT/COLA/AWI.html), and if you were born in 1960, the pandemic has fucked your Social Security benefits.

    Social Security benefits are indexed to the Average Indexed Monthly Earnings, which is calculated by the average amount earned nationally in the year you turn 60. It's a convoluted way to apply inflation adjustments to your earnings when calculating your benefit. Since earnings will be WAYYYYYYY down in 2020, the AIME will be much smaller than usual, and so will your benefits.

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    DanG
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    Lifer SteveM's Avatar
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    I was born in 1960.

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    Satans Donkey Uncle Snake's Avatar
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    If you were only depending on SS to get by you were fucked anyway.....

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    Lifer oVTo's Avatar
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    Quote Originally Posted by Uncle Snake View Post
    If you were only depending on SS to get by you were fucked anyway.....
    Agreed, and if you're middle or upper-class, it's disappointing. But if you're lower income and always have been, it's a lot more than that.

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    DanG
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    I've read the Forbes article and it used baseless and non-cited speculative estimates for reductions in the national average earnings.

    I think it will be interesting to see if the temporary expanded UI benefits will aid in minimizing the potential, if any, for a negative 2020 coefficient factor.

    Time will tell as more 2020 data becomes available - and its probably 1.5 years out until SS publishes the 2020 AWI.

    BLS's YoY weekly earnings and SS's forecasted future COLA:

    https://www.bls.gov/opub/ted/2020/re...aying-jobs.htm
    https://www.ssa.gov/OACT/COLA/awidevelop.html

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  6. #6
    Lifer
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    I dont know what I'm confusing it with but I always thought SSI was based off your highest earnings over a set period, I wanna say 10 years.

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  7. #7
    Soul Rider Paul_E_D's Avatar
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    Quote Originally Posted by boosten lebaron View Post
    I dont know what I'm confusing it with but I always thought SSI was based off your highest earnings over a set period, I wanna say 10 years.
    That's usually how pensions work.

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    Angry Gumball RandyO's Avatar
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    Bull SHit...... nothing has changed, you SSI check will be based on your highest 40 quarters

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    RandyO
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    Lifer
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    Quote Originally Posted by RandyO View Post
    Bull SHit...... nothing has changed, you SSI check will be based on your highest 40 quarters
    So i am right? Ssi is based on your highest 10 years basically? Im almost positive thats what my financial planner told me years and years ago before i took my current money grab job. My 10 years here are nearly up too.

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    Angry Gumball RandyO's Avatar
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    Quote Originally Posted by boosten lebaron View Post
    So i am right? Ssi is based on your highest 10 years basically? Im almost positive thats what my financial planner told me years and years ago before i took my current money grab job. My 10 years here are nearly up too.

    no, not highest 10 years, highest 40 quarters, they can be split up among earnings of your lifetime

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    RandyO
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    Quote Originally Posted by RandyO View Post
    no, not highest 10 years, highest 40 quarters, they can be split up among earnings of your lifetime
    Wait are you telling me I get the best 40 quarters of my working life despite a bad year or two? Picking and choosing?

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  12. #12

    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    How long do you have to contribute to even get SS when you reach the age?
    Or is it how much?
    What are the terms on this?

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    Angry Gumball RandyO's Avatar
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    Quote Originally Posted by G21forme View Post
    Wait are you telling me I get the best 40 quarters of my working life despite a bad year or two? Picking and choosing?
    yes, my best quarters were actually back in 80's when I worked for a big firm with a big salary, self employment generally sucks for building SSI

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    Angry Gumball RandyO's Avatar
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    Quote Originally Posted by G21forme View Post
    Wait are you telling me I get the best 40 quarters of my working life despite a bad year or two? Picking and choosing?
    you don't get to pick and choose, it's based on your employers, over the years, quarterly 941s and your quarterly reports if self employed and if you don't file quarterly, they divide the year equally based on yearly taxes. It pays to have a good accountant doing taxes, if self employed

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    RandyO
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    Lifer SteveM's Avatar
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    Quote Originally Posted by G21forme View Post
    Wait are you telling me I get the best 40 quarters of my working life despite a bad year or two? Picking and choosing?
    Also, the quarter caps out at 25% of that years annual social security tax limit.

    The current annual limit is 128,400. There is no increased SS benefit for exceeding that because at that point you aren’t contributing any more.

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    Lifer oVTo's Avatar
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    Also, your payment is indexed based on the calculation described in the link on my original post.

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    DanG
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  17. #17
    Lifer Garandman's Avatar
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    So for all you youngsters, some SSI factoids.

    - You can start drawing benefits at 62. But “Full Retirement Age” is now 66, and going up. If you were born in 1960, it’s 67.

    - Your benefit increases by 8% per year from full retirement age up to age 70 (for ‘54 and earlier) If you wait until age 70, your benefit is 132% of what it started as (if born 1954 or earlier). https://www.ssa.gov/benefits/retirem...943-delay.html

    - For our prototypical 1960-born, it’s 124% at 70 and you don’t draw full benefits until age 67.
    https://www.ssa.gov/benefits/retirem...960-delay.html

    Financial advisors vary in their approach. Advisor 1 says “Start drawing benefits at age 66, you never know when you’re gonna go.” Advisor B says “If you’ve survived until age 65, your life expectancy is 82. You will maximize your benefits by waiting until age 70 to begin withdrawals.” Take your pick.

    - In the Northeast, SSI is not a lot of money. Max monthly SSI per month in 2020 is $3,790 (for someone who files at age 70). For someone at “full retirement age”, max is $3,011, and for someone aged 62, max is $2,265. You will pay taxes out of that.

    - You have to go on Medicare at age 65.

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    Last edited by Garandman; 08-06-20 at 08:53 AM.
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  18. #18
    Angry Gumball RandyO's Avatar
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    Re: National Average Wage Index, or if you were born in 1960, you're fucked.

    Quote Originally Posted by Garandman View Post

    - You have to go on Medicare at age 65.
    not entirely true, but if you postpone, you premiums go up, unless you have coverage that qualifies for an exemption

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    RandyO
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