Answers to Quick Calculator Questions

Quick Calculator Retirement Estimator — accesses your earnings history to provide accurate benefit estimates Online Calculator — requires you to enter your complete earnings history Special-purpose version of the Online Calculator for those who receive a pension from work not covered by Social Security Detailed Calculator — powerful calculator you download to your computer	What earnings are covered under Social Security? How can I change the earnings that the Quick Calculator estimates? What is a relative growth factor? Can I make "What If" calculations with my future earnings? Why must my age be 22 or greater to use the Quick Calculator? I am already retired and have no earnings. If I enter 0 for earnings in the current year, why does the Quick Calculator tell me I am not eligible to receive a benefit? Does the Quick Calculator assume I will have covered earnings up to the year in which I start receiving a retirement benefit? What if I stop working sooner? How does the Quick Calculator estimate my past covered earnings? Does SSA have any examples that illustrate how retirement benefits are calculated?
1. What earnings are covered under Social Security?	Covered earnings are work-related earnings which are subject to Social Security taxation. Covered earnings include most types of wage income and self-employment income. Today almost all types of wages are covered by Social Security (notable exceptions are earnings from certain state and local governments and from railroads). If you had several years in non-covered employment, then we recommend that you not use the Quick Calculator because the Quick Calculator will estimate all of your past earnings as covered earnings and overestimate your benefit. Please use one of our other calculators.
2. How can I change the earnings that the Quick Calculator estimates?	Because Social Security benefits are based on earnings, the Quick Calculator must estimate your past earnings based on the earnings you enter for the current year. After you enter the information required by the Quick Calculator, you will see your benefit estimates and the phrase "See the earnings we used," located under your retirement benefit estimates. To change your earnings, and hence your benefit estimates, please follow the following steps. Click on "See the earnings we used" to see the estimated earnings. To change your past earnings, you have 2 options. You can manually change the earnings shown for any year(s), or you can enter a "relative growth factor" for your past earnings. Note that if you select option 2, you must check the second option box in addition to entering a growth factor in the box provided. If you choose to see your benefit estimates in future dollars, you may enter a growth factor for your future earnings. You can change growth factors as often as you like.
3. What is a relative growth factor?	A "relative growth factor" is a number that the Quick Calculator uses to adjust earnings growth relative to the growth of national average wages. Because most people begin their working careers with relatively few skills or job knowledge, they initially receive low wages. Then, as their knowledge and/or skills increase, their wages increase—typically faster than the increase in the average wage for all workers. On the other hand, as people approach retirement, their wages often grow slower than the increase in the average wage for all workers. A zero growth factor, for example, means earnings will grow at the same rate as the average wage index. A growth factor of 1 means that earnings will grow 1 percent faster than average wages. To illustrate, the national average wage index grew about 2.4 percent from 2000 to 2001. Using a growth factor of 1 would imply about a 3.4-percent (1.01 times 1.024) growth in earnings from 2000 to 2001. Please note that selecting a higher relative growth factor for past earnings means that your past earnings will grow faster. However, because your current earnings are fixed at the amount you gave, earnings in earlier years will be lower!
4. Can I make "What If" calculations with my future earnings?	You can see what the estimated effect of changing your future earnings will have on your benefits by taking the following steps. But first you need to be satisfied with the estimated past earnings used in your benefit calculation. On the page where you enter your date of birth and current earnings, select "inflated (future) dollars." After you submit your request, click on "See the earnings we used." Change your past earnings as described above. The easiest way to change your past earnings is to change the growth factor until the past earnings look fairly close to your actual earnings, and then select option 1 to make adjustments to earnings for a few specific years. Once you are satisfied with your past earnings, enter a future-earnings growth factor and submit your request. Be sure that option 1 for past earnings is checked (this is the default), otherwise the program will "forget" what you may have entered as actual past earnings and use a past-earnings growth factor.
5. Why must my age be 22 or greater to use the Quick Calculator?	To protect your privacy, the calculator does not have access to your earnings record and so must estimate your earnings. To do that, it needs at least one year of full-time earnings. People under age 22 are less likely to have full-time earnings, so we discourage them from using the calculator.
6. If I enter 0 for earnings in the current year, why does the Quick Calculator tell me I am not eligible to receive a benefit?	The calculator estimates your past earnings on the basis of your current earnings. Thus, if you enter zero (0) for your current-year earnings, the calculator assumes your past earnings are also zero and hence you would not be eligible for benefits. To prevent this, you need to enter the last year in which you had covered earnings and the amount of such earnings. Then the calculator will estimate your earnings for prior years and provide you with benefit estimates.
7. Does the Quick Calculator assume I will have covered earnings up to the year in which I start receiving a retirement benefit? What if I stop working sooner?	Unless you specify a retirement date that precedes the date when you reach age 62 (the earliest age at which you can receive retirement benefits), the calculator assumes you will have covered earnings up to the year in which you start receiving a benefit. If you plan to retire before you attain age 62, please be sure to give the month and year of your future retirement date. Please note that your benefit generally will be somewhat lower; the earlier you stop working, the lower it will be. If you have already stopped working and have no earnings in the current year, be sure to enter 0 for current year earnings and then enter the last year in which you had earnings and the amount of such earnings.
8. How does the Quick Calculator estimate my past covered earnings?	The calculator bases your estimated past earnings on the latest earnings figure you provide, the national average wage indexing series, and a relative growth factor that is initially set to 2 percent. You can change the earnings that the calculator uses by either changing the relative growth factor or by entering your actual earnings year by year.
9. Does SSA have any examples that illustrate how retirement benefits are calculated?	Yes, we have examples of retirement benefit calculations.


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