When it comes to planning for anything, not just retirement, “ballparking” definitely serves a purpose. Whether you call it that, or guestimating, or an educated guess, the process can help us progress with our plans when we don’t have all the answers to work from. Regarding the future after our work life, we can map out our retirement and income by ballparking a value of our benefits. Journalist and Forbes contributor John F. Wasik highlights how to get a ballpark estimate on our benefits and the caveats that can change that guess.
How to Get That Ballpark Figure
The best way to get an estimate on our benefits is to use the SSA benefits calculator. There you can input your information, earnings, and age and calculate a general benefit amount. COLA (cost-of-living-adjustment) can be calculated using the rate of inflation and that general estimate.
Our benefits are not static either and certain factors can affect how much we receive. The biggest determining factors include age and earnings. The bigger our earnings the larger our benefit; additionally, the longer we wait to claim, the larger the benefit.
Another factor that can considerably affect our benefits is insolvency. If the Trust runs out of funding, then every beneficiary will receive a pay cut regardless of their other qualifications.
Consider all these factors to determine a high and low ballpark estimate of your benefits. That way you can have alternative plans that take into account a realistic benefit while still providing a happy retirement.
For more Social Security information, follow the Council for Retirement Security.