mctoe

Social Security Offset

4 posts in this topic

Governmental defined benefit plan has a 50% Social Security offset at age 62 for retirees.  The offset is based on earnings only while an active plan member.  For example, a 45 year old plan participant "retires" after 15 years and his/her Social Security offset amount is only based on those 15 years.  Does anyone know how to calculate the offset using only specific years of earnings?  In this example, how are you able to determine what the SS benefit is at age 62 since it is 17 years in the future?     

Thank you.

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I can dimly recall that there used to be plans whose Social Security offsets were based on the assumption of no future earnings.  As I recall, one bases the projected Social Security benefit to be used for offset purposes on an earnings history only through the current date.  It is not significantly more complicated than calculating offsets based on the assumption that the current rate of earnings would continue until Normal Retirement Age.  While we would have created a pre-hire earnings history in either case, the extra complication you have of only counting post-hire earnings is not materially more difficult than also building in an assumption of no earnings after termination of employment.

You would, presumably, adjust the Social Security offset down for early commencement at age 62.

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Thank you for the replies.  I tried the detailed SS calculator a few weeks ago and had some difficulties.  I will try it again.  

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