The Social Security program provides income to retired workers and their families, qualifying disabled workers and their families, and survivors of workers. The progressivity of the Social Security benefit formula allows individuals with lower earnings to receive monthly benefits that are a higher percentage of such earnings compared to that percentage for those with higher earnings. For hypothetical earners with a range of full-lifetime average earnings levels1 at a range of ages in 2008, this note displays their current earnings in 2007 and the amounts they would expect to receive at benefit entitlement.
The assumptions underlying the attached tables are similar to those used in the annual Social Security statement mailed to workers and former workers aged 25 and older. Specifically, the benefit amounts reflect no increase in the cost of living or in the average wage level after 2007. Thus, the benefit estimates for workers retiring in future years are on a roughly comparable basis to the benefit estimates for disabled workers and survivors of deceased workers, which both assume benefit entitlement in 2008.
All hypothetical workers, except the maximum,2 are assumed to have scaled earnings patterns beginning at age 21. These patterns reflect the actual experience of insured workers during 1991-2004, which show relatively low wages and probability of work at younger and older ages and higher relative wages and probability of work at mid-career. 3 Earnings levels after 2007 for scaled workers illustrated in this note are not assumed to increase due to changes in the average wage level, but are assumed to follow the scaled earnings pattern as age increases. It is important to note that this approach for determining future earnings differs from that used in the annual Social Security statement.
Four tables are attached. The tables allow workers at various ages in 2008 to look up potential future benefit levels consistent with their earnings level in 2007. Each table lists earnings in 2007 at their current age and annual benefit amounts at entitlement for hypothetical individuals associated with the following full-lifetime average earnings levels: $10,000, $20,000, $30,000, $40,000, $50,000, $60,000, and maximum. Each table provides this information for individuals at specified attained ages in 2008. Additional information about each table is provided below.
Age in 2008
|
Age at
benefit entitlement (NRA) |
Estimated earnings in 2007 and benefit at entitlement (NRA)
|
|||||||
25
|
67
|
Earnings in 2007
|
$5,765
|
$11,531
|
$17,296
|
$23,061
|
$28,827
|
$34,592
|
$97,500
|
Benefit at entitlement
|
8,352
|
11,556
|
14,760
|
17,952
|
21,156
|
23,280
|
28,908
|
||
35
|
67
|
Earnings in 2007
|
9,727
|
19,455
|
29,182
|
38,910
|
48,637
|
58,365
|
97,500
|
Benefit at entitlement
|
8,352
|
11,556
|
14,760
|
17,952
|
21,156
|
23,280
|
28,980
|
||
45
|
67
|
Earnings in 2007
|
10,961
|
21,922
|
32,884
|
43,845
|
54,806
|
65,767
|
97,500
|
Benefit at entitlement
|
8,352
|
11,556
|
14,760
|
17,952
|
21,156
|
23,280
|
29,028
|
||
55
|
66
|
Earnings in 2007
|
10,617
|
21,234
|
31,852
|
42,469
|
53,086
|
63,703
|
97,500
|
Benefit at entitlement
|
8,352
|
11,556
|
14,760
|
17,952
|
21,156
|
23,280
|
28,944
|
||
65
|
66
|
Earnings in 2007
|
6,980
|
13,961
|
20,941
|
27,922
|
34,902
|
41,883
|
97,500
|
Benefit at entitlement
|
7,776
|
10,764
|
13,740
|
16,728
|
19,716
|
21,672
|
26,328
|
||
Full-lifetime earnings level3
|
10,000
|
20,000
|
30,000
|
40,000
|
50,000
|
60,000
|
Maximum
|
||
Percent of fully insured workers with career average earnings at this level or below 4
|
13
|
30
|
47
|
63
|
75
|
84
|
100
|
1The assumptions underlying the above benefit estimates are similar to those used for the Social Security Statement. These estimates reflect no increase in the cost of living or average wage and earnings levels after December 2007. However, earnings after 2007 follow scaled earnings patterns as age increases. (These assumptions are not consistent with those used for table VI.F10 of the 2008 Trustees Report.) 2Scaled earnings patterns starting at age 21 are assumed for all but the maximum worker. These patterns reflect the actual experience of insured workers during 1991-2004. For the maximum worker, earnings start at age 22 and are assumed to equal the taxable maximum (the OASDI benefit and contribution base) for each year through 2007. (For 2007, this amount was $97,500.) For more details on the scaled-earnings patterns see Actuarial Notes Number 2007.3, located at: www.socialsecurity.gov/OACT/NOTES/ran3/an2007-3.html, and 2008.3 (forthcoming). 3The full-lifetime earnings level reflects the average of the highest 35 years of wage-indexed earnings (wage-indexed to 2007) expected for the illustration assuming the worker survives to age 65 without becoming disabled. 4Based on a 1% sample of actual earnings histories for individuals aged 25 through 65 who are fully insured in 2005. |
Office of the Chief Actuary
Social Security Administration
August, 2008
Age in 2008
|
Age at
benefit entitlement |
Estimated earnings in 2007 and benefit at entitlement (Age 65)
|
|||||||
25
|
65
|
Earnings in 2007
|
$5,765
|
$11,531
|
$17,296
|
$23,061
|
$28,827
|
$34,592
|
$97,500
|
Benefit at entitlement
|
7,236
|
10,008
|
12,792
|
15,564
|
18,336
|
20,172
|
25,056
|
||
35
|
65
|
Earnings in 2007
|
9,727
|
19,455
|
29,182
|
38,910
|
48,637
|
58,365
|
97,500
|
Benefit at entitlement
|
7,236
|
10,008
|
12,792
|
15,564
|
18,336
|
20,172
|
25,116
|
||
45
|
65
|
Earnings in 2007
|
10,961
|
21,922
|
32,884
|
43,845
|
54,806
|
65,767
|
97,500
|
Benefit at entitlement
|
7,236
|
10,008
|
12,792
|
15,564
|
18,336
|
20,172
|
25,152
|
||
55
|
65
|
Earnings in 2007
|
10,617
|
21,234
|
31,852
|
42,469
|
53,086
|
63,703
|
97,500
|
Benefit at entitlement
|
7,800
|
10,788
|
13,776
|
16,764
|
19,740
|
21,732
|
27,000
|
||
65
|
65
|
Earnings in 2007
|
6,980
|
13,961
|
20,941
|
27,922
|
34,902
|
41,883
|
97,500
|
Benefit at entitlement
|
7,260
|
10,044
|
12,828
|
15,612
|
18,408
|
20,220
|
24,360
|
||
Full-lifetime earnings level3
|
10,000
|
20,000
|
30,000
|
40,000
|
50,000
|
60,000
|
Maximum
|
||
Percent of fully insured workers with career average earnings at this level or below4
|
13
|
30
|
47
|
63
|
75
|
84
|
100
|
1The assumptions underlying the above benefit estimates are similar to those used for the Social Security Statement. These estimates reflect no increase in the cost of living or average wage and earnings levels after December 2007. However, earnings after 2007 follow scaled earnings patterns as age increases. (These assumptions are not consistent with those used for table VI.F10 of the 2008 Trustees Report.) 2Scaled earnings patterns starting at age 21 are assumed for all but the maximum worker. These patterns reflect the actual experience of insured workers during 1991-2004. For the maximum worker, earnings start at age 22 and are assumed to equal the taxable maximum (the OASDI benefit and contribution base) for each year through 2007. (For 2007, this amount was $97,500.) For more details on the scaled-earnings patterns see Actuarial Notes Number 2007.3, located at: www.socialsecurity.gov/OACT/NOTES/ran3/an2007-3.html, and 2008.3 (forthcoming). 3The full-lifetime earnings level reflects the average of the highest 35 years of wage-indexed earnings (wage-indexed to 2007) expected for the illustration assuming the worker survives to age 65 without becoming disabled. 4Based on a 1% sample of actual earnings histories for individuals aged 25 through 65 who are fully insured in 2005. |
Office of the Chief Actuary
Social Security Administration
August, 2008
Age at benefit
entitlement in 2008 |
Earnings in 2007 and benefit for 2008
|
|||||||
25
|
Earnings in 2007
|
$5,765
|
$11,531
|
$17,296
|
$23,061
|
$28,827
|
$34,592
|
$97,500
|
Benefit at entitlement
|
4,284
|
7,992
|
9,528
|
11,052
|
12,576
|
14,100
|
27,984
|
|
35
|
Earnings in 2007
|
9,727
|
19,455
|
29,182
|
38,910
|
48,637
|
58,365
|
97,500
|
Benefit at entitlement
|
7,080
|
9,984
|
12,504
|
15,024
|
17,544
|
20,064
|
27,960
|
|
45
|
Earnings in 2007
|
10,961
|
21,922
|
32,884
|
43,845
|
54,806
|
65,767
|
97,500
|
Benefit at entitlement
|
7,896
|
10,848
|
13,800
|
16,752
|
19,704
|
21,996
|
27,912
|
|
55
|
Earnings in 2007
|
10,617
|
21,234
|
31,852
|
42,469
|
53,086
|
63,703
|
97,500
|
Benefit at entitlement
|
8,076
|
11,208
|
14,340
|
17,472
|
20,604
|
22,500
|
27,600
|
|
Full-lifetime earnings level2
|
10,000
|
20,000
|
30,000
|
40,000
|
50,000
|
60,000
|
Maximum
|
|
Percent of disability insured workers with career earnings at this level or below3
|
7
|
24
|
42
|
60
|
73
|
83
|
100
|
1Scaled earnings patterns starting at age 21 are assumed for all but the maximum worker. These patterns reflect the actual experience of insured workers during 1991-2004. For the maximum worker, earnings start at age 22 and are assumed to equal the taxable maximum (the OASDI benefit and contribution base) for each year through 2007. (For 2007, this amount was $97,500.) For more details on the scaled-earnings patterns see Actuarial Notes Number 2007.3, located at: www.socialsecurity.gov/OACT/NOTES/ran3/an2007-3.html, and 2008.3 (forthcoming). 2The full-lifetime earnings level reflects the average of the highest 35 years of wage-indexed earnings (wage-indexed to 2007) expected for the illustration assuming the worker survives to age 65 without having become disabled. 3Based on a 1% sample of actual earnings histories for individuals aged 25 through 64 who are disability insured in 2005. Note: These estimates reflect no increase in the cost of living after December 2007. |
Office of the Chief Actuary
Social Security Administration
August, 2008
Age of deceased spouse in 2008
|
Age of surviving spouse in 2008
|
Benefit at entitlement in 2008 and deceased spouse's earnings in 2007
|
|||||||
25
|
25
|
Spouse and one child
|
$7,056
|
$12,432
|
$14,952
|
$17,472
|
$19,992
|
$22,512
|
$42,096
|
Child only
|
3,528
|
6,216
|
7,476
|
8,736
|
9,996
|
11,256
|
21,048
|
||
Spouse and two children
|
7,056
|
12,444
|
14,964
|
18,396
|
22,956
|
27,528
|
49,116
|
||
Earnings of deceased spouse in 2007
|
5,765
|
11,531
|
17,296
|
23,061
|
28,827
|
34,592
|
97,500
|
||
35
|
35
|
Spouse and one child
|
11,472
|
15,576
|
19,680
|
23,760
|
27,864
|
31,944
|
42,144
|
Child only
|
5,736
|
7,788
|
9,840
|
11,880
|
13,932
|
15,972
|
21,072
|
||
Spouse and two children
|
11,484
|
15,588
|
22,380
|
29,652
|
33,300
|
37,272
|
49,188
|
||
Earnings of deceased spouse in 2007
|
9,727
|
19,455
|
29,182
|
38,910
|
48,637
|
58,365
|
97,500
|
||
45
|
45
|
Spouse and one child
|
11,904
|
16,392
|
20,904
|
25,392
|
29,880
|
33,168
|
41,904
|
Child only
|
5,952
|
8,196
|
10,452
|
12,696
|
14,940
|
16,584
|
20,952
|
||
Spouse and two children
|
11,904
|
16,452
|
24,600
|
31,104
|
35,124
|
38,712
|
48,888
|
||
Earnings of deceased spouse in 2007
|
10,961
|
21,922
|
32,884
|
43,845
|
54,806
|
65,767
|
97,500
|
||
60
|
60
|
Spouse only
|
5,748
|
7,980
|
10,200
|
12,420
|
14,640
|
16,032
|
19,308
|
Child only
|
6,036
|
8,364
|
10,692
|
13,020
|
15,360
|
16,824
|
20,256
|
||
Spouse and two children
|
12,072
|
17,040
|
25,500
|
31,692
|
35,856
|
39,252
|
47,280
|
||
Earnings of deceased spouse in 2007
|
8,909
|
17,818
|
26,727
|
35,636
|
44,545
|
53,454
|
97,500
|
||
Full-lifetime earnings level2
|
10,000
|
20,000
|
30,000
|
40,000
|
50,000
|
60,000
|
Maximum
|
||
Percent of fully or currently insured workers with career average earnings at this level or below3
|
14
|
31
|
48
|
64
|
76
|
84
|
100
|
1Scaled earnings patterns starting at age 21 are assumed for all but the maximum worker. These patterns reflect the actual experience of insured workers during 1991-2004. For the maximum worker, earnings start at age 22 and are assumed to equal the taxable maximum (the OASDI benefit and contribution base) for each year through 2007. (For 2007, this amount was $97,500.) For more details on the scaled-earnings patterns see Actuarial Notes Number 2007.3, located at: www.socialsecurity.gov/OACT/NOTES/ran3/an2007-3.html, and 2008.3 (forthcoming). 2The full-lifetime earnings level reflects the average of the highest 35 years of wage-indexed earnings (wage-indexed to 2007) expected for the illustration assuming the worker were to survive to age 65 without becoming disabled. 3Based on a 1% sample of actual earnings histories for individuals aged 25 through 65 who are fully or currently insured in 2005. Note: These estimates reflect no increase in the cost of living after December 2007. |
Office of the Chief Actuary
Social Security Administration
August, 2008
1The full-lifetime average earnings level reflects the average of the highest 35 years of wage-indexed earnings (wage-indexed to 2007) expected for the illustration assuming that the worker survives to age 65 without becoming disabled.
2 For the maximum worker, earnings start at age 22 and are assumed to equal the taxable maximum (the OASDI benefit and contribution base) for each year through 2007. Earnings after 2007 are assumed to equal the taxable maximum of $97,500 for 2007.
3 For more details on development of the scaled earnings patterns, see Actuarial Notes 2007.3, located at: www.socialsecurity.gov/OACT/NOTES/ran3/an2007-3.html, and 2008.3 (forthcoming).