Social Security’s security

Will you get what you were promised?

The Social Security Administration will happily forecast your future monthly retirement check. Trouble is, it’s often off the mark. Understanding the sometimes flawed assumptions can help you make smarter decisions about when to claim your benefit.

You can find your estimate online by creating an account at the Social Security Administration’s site, or you can call 800-772-1213 to request a paper version. The agency projects how much you’ll receive if you start benefits at various ages and when benefits max out.

1 How it works

When you apply for benefits, Social Security uses your 35 highest-earning years to calculate your check. Each of these years is “indexed,” or adjusted to reflect wage and price inflation over time.

When estimating your future benefit, however, the agency assumes no future growth in wages or prices, says economist Laurence Kotlikoff, creator of the Maximize My Social Security site. That often creates “lowball” estimates for younger workers, he says.

On the other hand, the agency could be overestimating your benefit if your income has peaked, since the assumption is that you will continue earning roughly the same amount until you apply for Social Security.

However, many people in midlife lose their jobs and never make as much again.

“You can see why Americans are confused and surprised when they go into the Social Security office with an old statement and learn their benefits will be lower than they thought,” says William Meyer, founder of Social Security Solutions, another claiming-strategies site.

2 Other factors

Other circumstances can upend the estimates. Some people will qualify for spousal or survivor benefits that are larger than what they earn on their own record. Retirees with minor children can get child benefits that boost their checks.

Nastier surprises may await people who worked for certain government agencies or were employed abroad. If they get pensions from jobs that didn’t pay into Social Security, the “windfall elimination provision” could reduce their Social Security checks significantly.

3 What can I do?

If you’re within 10 years of retirement getting a more accurate estimate of your benefits can help you plan when to retire. You can start with your My Social Security account, which includes a link to a retirement calculator that allows you to adjust your average future earnings.

Or consider a session with a fee-only financial planner who has access to more robust software. They can help you fine-tune your estimates, advise you on claiming strategies and make sure your retirement isn’t based on false promises.

AP This article was provided to The Associated Press by the personal finance website NerdWallet. Want to suggest a personal finance topic that Quick Fix can address? Email apmoney@ap.org.