The Social Security program provides income to qualifying disabled workers, retired workers, and survivors. The progressivity of the Social Security benefit formula allows individuals with lower earnings to receive 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 and a range of attained ages in 2004, this note displays earnings in 2003 and the corresponding amounts they would expect to receive at benefit entitlement.
The assumptions underlying the attached tables are similar to those used in the 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 2003. 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 2004.
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 1991-2000, 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 for scaled workers after 2003, while not assumed to increase due to changes in average wage levels, 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 Social Security Statement.
Four tables are attached. Each table lists earnings in 2003 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 2004. Additional information about each table is provided below.
Age in 2004
|
Age at
benefit entitlement (NRA) |
Estimated earnings in 2003 and benefit at entitlement (NRA)
|
|||||||
25
|
67
|
Earnings in 2003
|
$5,898
|
$11,796
|
$17,693
|
$23,591
|
$29,489
|
$35,387
|
$87,000
|
Benefit at entitlement
|
7,541
|
10,740
|
13,943
|
17,141
|
19,513
|
21,013
|
25,063
|
||
35
|
67
|
Earnings in 2003
|
9,778
|
19,557
|
29,335
|
39,113
|
48,891
|
58,670
|
87,000
|
Benefit at entitlement
|
7,541
|
10,740
|
13,943
|
17,141
|
19,513
|
21,013
|
25,063
|
||
45
|
66 & 10 months
|
Earnings in 2003
|
11,060
|
22,120
|
33,180
|
44,240
|
55,299
|
66,359
|
87,000
|
Benefit at entitlement
|
7,541
|
10,740
|
13,943
|
17,141
|
19,513
|
21,013
|
24,890
|
||
55
|
66
|
Earnings in 2003
|
10,443
|
20,886
|
31,328
|
41,771
|
52,214
|
62,657
|
87,000
|
Benefit at entitlement
|
7,541
|
10,740
|
13,943
|
17,141
|
19,513
|
21,013
|
24,512
|
||
65
|
65 & 4
months |
Earnings in 2003
|
6,898
|
13,796
|
20,695
|
27,593
|
34,491
|
41,389
|
87,000
|
Benefit at entitlement
|
7,204
|
10,268
|
13,331
|
16,394
|
18,587
|
19,732
|
21,905
|
||
Full lifetime average earnings level 3
|
10,000
|
20,000
|
30,000
|
40,000
|
50,000
|
60,000
|
Maximum
|
||
Percent of fully insured workers with lifetime average earnings at this level or below 4
|
15
|
33
|
52
|
68
|
80
|
88
|
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 2003. However, earnings after 2003 follow scaled earnings patterns as age increases. (These assumptions are not consistent with those used for table VI.F11 of the 2004 Trustees Report.) 2Scaled earnings patterns starting at age 21 are assumed for all but the maximum worker. These scaled patterns reflect the relative earnings level by age experienced during 1991-2000. For the maximum worker, earnings start at age 22 and are assumed to be equal to the OASDI benefit and contribution base through 2003. (For 2003, this amount was $87,000.) For more details on the scaled-earnings patterns see Actuarial Notes Numbers 144 and 2004.3, located at: http://www.socialsecurity.gov/OACT/NOTES/note2000s/note144.html and http://www.socialsecurity.gov/OACT/NOTES/ran3/an2004-3.html. 3The full lifetime average earnings level reflects the average earnings (wage-indexed to 2003) expected for the illustration assuming the worker survives to retirement age without becoming disabled. 4Based on actual earnings histories for individuals who are fully insured in 2001. |
Office of the Chief Actuary
Social Security Administration
April 21, 2004
Age in 2004
|
Age at
benefit entitlement |
Estimated earnings in 2003 and benefit at entitlement (Age 65)
|
|||||||
25
|
65
|
Earnings in 2003
|
$5,898
|
$11,796
|
$17,693
|
$23,591
|
$29,489
|
$35,387
|
$87,000
|
Benefit at entitlement
|
6,535
|
9,307
|
12,083
|
14,855
|
16,910
|
18,211
|
21,721
|
||
35
|
65
|
Earnings in 2003
|
9,778
|
19,557
|
29,335
|
39,113
|
48,891
|
58,670
|
87,000
|
Benefit at entitlement
|
6,535
|
9,307
|
12,083
|
14,855
|
16,910
|
18,211
|
21,696
|
||
45
|
65
|
Earnings in 2003
|
11,060
|
22,120
|
33,180
|
44,240
|
55,299
|
66,359
|
87,000
|
Benefit at entitlement
|
6,618
|
9,427
|
12,238
|
15,046
|
17,128
|
18,444
|
21,776
|
||
55
|
65
|
Earnings in 2003
|
10,443
|
20,886
|
31,328
|
41,771
|
52,214
|
62,657
|
87,000
|
Benefit at entitlement
|
7,038
|
10,024
|
13,013
|
15,997
|
18,211
|
19,612
|
22,733
|
||
65
|
65
|
Earnings in 2003
|
6,898
|
13,796
|
20,695
|
27,593
|
34,491
|
41,389
|
87,000
|
Benefit at entitlement
|
7,043
|
10,039
|
13,034
|
16,030
|
18,173
|
19,292
|
21,418
|
||
Full lifetime average earnings level3
|
10,000
|
20,000
|
30,000
|
40,000
|
50,000
|
60,000
|
Maximum
|
||
Percent of fully insured workers with lifetime average earnings at this level or below4
|
15
|
33
|
52
|
68
|
80
|
88
|
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 2003. However, earnings after 2003 follow scaled earnings patterns as age increases. (These assumptions are not consistent with those used for table VI.F11 of the 2004 Trustees Report.) 2Scaled earnings patterns starting at age 21 are assumed for all but the maximum worker. These scaled patterns reflect the relative earnings level by age experienced during 1991-2000. For the maximum worker, earnings start at age 22 and are assumed to be equal to the OASDI benefit and contribution base through 2003. (For 2003, this amount was $87,000.) For more details on the scaled-earnings patterns see Actuarial Notes Numbers 144 and 2004.3, located at: http://www.socialsecurity.gov/OACT/NOTES/note2000s/note144.html and http://www.socialsecurity.gov/OACT/NOTES/ran3/an2004-3.html. 3The full lifetime average earnings level reflects the average earnings (wage-indexed to 2003) expected for the illustration assuming the worker survives to retirement age without becoming disabled. 4Based on actual earnings histories for individuals who are fully insured in 2001. |
Office of the Chief Actuary
Social Security Administration
April 21, 2004
Age at benefit
entitlement in 2004 |
Earnings in 2003 and benefit for 2004
|
|||||||
25
|
Earnings in 2003
|
$5,898
|
$11,796
|
$17,693
|
$23,591
|
$29,489
|
$35,387
|
$87,000
|
Benefit at entitlement
|
4,460
|
7,430
|
9,017
|
10,603
|
12,188
|
13,778
|
24,438
|
|
35
|
Earnings in 2003
|
9,778
|
19,557
|
29,335
|
39,113
|
48,891
|
58,670
|
87,000
|
Benefit at entitlement
|
6,859
|
9,462
|
13,146
|
14,669
|
17,273
|
19,105
|
24,110
|
|
45
|
Earnings in 2003
|
11,060
|
22,120
|
33,180
|
44,240
|
55,299
|
66,359
|
87,000
|
Benefit at entitlement
|
7,304
|
10,349
|
13,394
|
16,440
|
18,922
|
20,351
|
23,926
|
|
55
|
Earnings in 2003
|
10,443
|
20,886
|
31,328
|
41,771
|
52,214
|
62,657
|
87,000
|
Benefit at entitlement
|
7,474
|
10,691
|
13,909
|
17,126
|
19,325
|
20,833
|
23,254
|
|
Full lifetime average earnings level2
|
10,000
|
20,000
|
30,000
|
40,000
|
50,000
|
60,000
|
Maximum
|
|
Percent of disability insured workers with average earnings at this level or below3
|
9
|
27
|
47
|
65
|
78
|
87
|
100
|
1Scaled earnings patterns starting at age 21 are assumed for all but the maximum worker. These scaled patterns reflect the relative earnings level by age experienced during 1991-2000. For the maximum worker, earnings start at age 22 and are assumed to be equal to the OASDI benefit and contribution base through 2003. (For 2003, this amount was $87,000.) For more details on the scaled-earnings patterns see Actuarial Notes Numbers 144 and 2004.3, located at: http://www.socialsecurity.gov/OACT/NOTES/note2000s/note144.html and http://www.socialsecurity.gov/OACT/NOTES/ran3/an2004-3.html. 2The full lifetime average earnings level reflects the average earnings (wage-indexed to 2003) expected for the illustration assuming the worker survives to retirement age without becoming disabled. 3Based on actual earnings histories for individuals who are disability insured in 2001. |
Office of the Chief Actuary
Social Security Administration
April 21, 2004
Age of deceased spouse in 2004
|
Age of surviving spouse in 2004
|
Benefit at entitlement in 2004 and deceased spouse's earnings in 2003
|
|||||||
25
|
25
|
Spouse and one child
|
$7,306
|
$11,590
|
$14,193
|
$16,798
|
$19,400
|
$22,003
|
$37,013
|
Child only
|
3,653
|
5,795
|
7,097
|
8,399
|
9,700
|
11,002
|
18,507
|
||
Spouse and two children
|
7,306
|
11,590
|
14,287
|
19,010
|
23,730
|
26,903
|
43,187
|
||
Earnings of deceased spouse in 2003
|
5,898
|
11,796
|
17,693
|
23,591
|
29,489
|
35,387
|
87,000
|
||
35
|
35
|
Spouse and one child
|
10,592
|
14,803
|
19,015
|
23,225
|
27,436
|
29,516
|
36,376
|
Child only
|
5,297
|
7,402
|
9,508
|
11,613
|
13,718
|
14,758
|
18,188
|
||
Spouse and two children
|
10,592
|
15,394
|
23,032
|
27,995
|
32,014
|
34,441
|
42,444
|
||
Earnings of deceased spouse in 2003
|
9,778
|
19,557
|
29,335
|
39,113
|
48,891
|
58,670
|
87,000
|
||
45
|
45
|
Spouse and one child
|
11,020
|
15,656
|
20,288
|
24,925
|
28,535
|
30,710
|
35,926
|
Child only
|
5,510
|
7,828
|
10,144
|
12,462
|
14,268
|
15,355
|
17,963
|
||
Spouse and two children
|
11,020
|
16,942
|
25,339
|
29,513
|
33,296
|
35,833
|
41,918
|
||
Earnings of deceased spouse in 2003
|
11,060
|
22,120
|
33,180
|
44,240
|
55,299
|
66,359
|
87,000
|
||
60
|
60
|
Spouse and one child
|
5,319
|
7,592
|
9,865
|
12,139
|
13,754
|
14,770
|
16,188
|
Child only
|
5,579
|
7,963
|
10,348
|
12,733
|
14,427
|
15,493
|
16,980
|
||
Spouse and two children
|
11,158
|
17,431
|
25,736
|
29,998
|
33,668
|
36,155
|
39,625
|
||
Earnings of deceased spouse in 2003
|
8,722
|
17,444
|
26,166
|
34,888
|
43,611
|
52,333
|
87,000
|
||
Full lifetime average earnings level2
|
10,000
|
20,000
|
30,000
|
40,000
|
50,000
|
60,000
|
Maximum
|
||
Percent of fully or currently insured workers with lifetime average earnings at this level or below3
|
15
|
33
|
52
|
68
|
80
|
88
|
100
|
1Scaled earnings patterns starting at age 21 are assumed for all but the maximum worker. These scaled patterns reflect the relative earnings level by age experienced during 1991-2000. For the maximum worker, earnings start at age 22 and are assumed to be equal to the OASDI benefit and contribution base through 2003. (For 2003, this amount was $87,000.) For more details on the scaled-earnings patterns see Actuarial Notes Numbers 144 and 2004.3, located at: http://www.socialsecurity.gov/OACT/NOTES/note2000s/note144.html and http://www.socialsecurity.gov/OACT/NOTES/ran3/an2004-3.html. 2The full lifetime average earnings level reflects the average earnings (wage-indexed to 2003) expected for the illustration assuming the worker survives to retirement age without becoming disabled. 3Based on actual earnings histories for individuals who are fully or currently insured in 2001. |
Office of the Chief Actuary
Social Security Administration
April 21, 2004
1The full lifetime average earnings level reflects the average of the highest 35 years of wage-indexed earnings (wage-indexed to 2003) expected for the illustration assuming that the worker survives to retirement age 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 2003. Earnings after 2003 are assumed to equal the taxable maximum of $87,000 for 2003.
3 For more details on development of the scaled earnings patterns, see Actuarial Notes 144 and 2004.3, located at: http://www.socialsecurity.gov/OACT/NOTES/note2000s/note144.html and http://www.socialsecurity.gov/OACT/NOTES/ran3/an2004-3.html.
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