Ways to Estimate Social Security Income

Social Security Eligibility

For each client in the household, select whether to include Social Security benefits using the application's built-in Social Security calculations. To use the Social Security calculator, just choose Yes for the Include Social Security benefit option under the client's name. 

If you're dealing with a special Social Security situation, such as a survivor benefit or Windfall Elimination (WEP) benefit, you will choose No here and enter that benefit on the Other Income tab.

Estimation Methods

From here, you can either enter the Social Security benefit manually, which is useful for benefits that are already being received, or you can enter some information to obtain a full range of claiming dates, benefit amounts on those dates, and break-even ages. To access these estimates, select Estimate.

Income Lab provides five ways to enter data about each client, which will produce estimates of Social Security benefits for each possible claiming month.

• Primary Insurance Amount
• Benefit at 62
• Benefit on Specified Date
• Earnings History
• Annual Income

The best place to find data on a client's Social Security situation is the Social Security Administration, where clients can create an online account and access up-to-date information. As a guide, see the example Social Security statement linked below.

Example Social Security Statement

Primary Insurance Amount

Primary Insurance Amount, or PIA, is a person's benefit at full retirement age. You can find this in several places on a Social Security statement, including at the top of the first page:

PIA can also be found in the Your Estimated Benefits section under Retirement -> your full retirement age:

Benefit at 62

This is the amount of Social Security income a person would receive if they choose to begin receiving benefits at age 62, the earliest possible claiming date. This value can also be found in the Your Estimated Benefits section under "age 62". This amount will always be less than a person's PIA. 

Please note that this is not necessarily the date when the benefit has to start. The application simply uses this information to calculate the range of claiming options and benefit amounts. You will still need to choose the benefit start date using the slider. That start date can be after age 62.

Benefit on Specified Date

If you don't have access to PIA or a benefit at 62, you might know the benefit on another date. Enter the correct amount and the date when this benefit would be received, and we'll update your PIA and the benefit amounts on all other claiming dates. 

Please note that this is not necessarily the date when the benefit has to start. The application simply uses this information to calculate the range of claiming options and benefit amounts. You will still need to choose the benefit start date using the slider.

Earnings History

You may also enter a person's full annual earnings history to produce Social Security benefit estimates. This history can be found on a Social Security statement, or a client may bring it to you. This method may be particularly useful if the person plans to have additional low-income or "zero years" and does not yet have a 35-year earnings history. To enter this history, choose the first calendar year in which this client had earned income on the First year of earnings drop-down. Then click on Enter Earnings Data.

You will then see a form for each year between this first earnings year and the current year.

Fill in this form, leaving $0 in years with no earnings. Navigate forward and backward through the form using the arrows. When you're done, click Save.

Annual Income

Finally, you can estimate Social Security income by entering a person's annual income from a single year. Simply enter the total gross income amount and the last year it was earned.

Note that the Annual Income estimation method is the least likely of the available methods to yield an accurate estimate, especially if the annual income varied for this individual.