Planning Briefs

What Will Your Social Security Benefits Come To?

Published Monday, March 28, 2016 at: 7:00 AM EDT

Until a few years ago, the Social Security Administration (SSA) mailed periodic estimates of retirement benefits to all workers. Not anymore. But you still can get a good idea of what your monthly benefit amount will be by using the SSA's Retirement Estimator at www.ssa.gov/retire/estimator.html.

Keep in mind that this is just an estimate based on your earnings history. It isn't written in stone. Also, Social Security rules may change in the future.

You can use the Retirement Estimator if you have enough Social Security credits to qualify for benefits and you're not (1) currently receiving benefits on your own Social Security record; or (2) waiting for a government decision about benefits or Medicare; or (3) age 62 or older and receiving benefits on another Social Security record; or (4) eligible for a pension based on work not covered by Social Security.

Note that your actual retirement benefits can differ from the estimate for several reasons:

Your earnings may go up or down in the future.
After benefits begin, they may be adjusted for cost-of-living increases.
Estimated benefits are based on current law.
Your benefit amount may be affected by military service, railroad employment, or pensions earned through work on which you did not pay Social Security tax.

Some other online estimators address those issues. But even if you don't get the estimate of your future benefits right to the penny, a ballpark figure can help in your overall retirement planning.

This article was written by a professional financial journalist for Preferred NY Financial Group,LLC and is not intended as legal or investment advice.

An individual retirement account (IRA) allows individuals to direct pretax incom, up to specific annual limits, toward retirements that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Tranditional IRA. Contributions to the Tranditional IRA may be tax-deductible depending on the taxpayer's income, tax-filling status and other factors. Taxed must be paid upon withdrawal of any deducted contributions plus earnings and on the earnings from your non-deducted contributions. Prior to age 59%, distributions may be taken for certain reasons without incurring a 10 percent penalty on earnings. None of the information in this document should be considered tax or legal advice. Please consult with your legal or tax advisor for more information concerning your individual situation.

Contributions to a Roth IRA are not tax deductible and these is no mandatory distribution age. All earnings and principal are tax free if rules and regulations are followed. Eligibility for a Roth account depends on income. Principal contributions can be withdrawn any time without penalty (subject to some minimal conditions).