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Social Security Benefits Evaluator


For a broader list of terms, visit the Social Security Administration Glossary. Clicking on this link will take you away from the T. Rowe Price website to the official site of the U.S. Social Security Administration.

Please note that the Social Security Administration often uses several different terms to describe similar concepts or makes distinctions in related terms for technical reasons.

Annual maximum taxable limit
Also: Wage base
The maximum annual amount of earnings to which Social Security payroll tax (FICA or SECA) applies and on which Social Security benefits are based. The cap amount is indexed annually for inflation.

Also: Claimant
Person applying or filing to receive benefits.

The monthly amount paid by the SSA to the income beneficiary. The beneficiary is initially notified of the award by receipt of a Letter of Determination from the SSA that also confirms he or she is now included on the payment rolls.
Also: Recipient
Person receiving benefits.

Benefit calculation
Benefit amounts are calculated using the Primary Insurance Amount (PIA) of the worker, with any reductions or credits and any eligibility rules applied; the Primary Insurance Amount is generally calculated on the top-earning 35 years of indexed earnings. See: Primary Insurance Amount (PIA); indexed earnings; zero year

See: Applicant

Cost-of-living adjustment (COLA)
The increase in a beneficiary's Social Security benefit made annually (if applicable) by the SSA, to ensure a beneficiary's payments keep pace with inflation.

Covered wages
Also: Earnings record,
taxable earnings/taxable wages
Annual earnings up to the wage base that are taxed. The taxes are contributed to Social Security, entitling you to later Social Security benefits.

Covered work history
A chronological history of your annual covered wages—generally, the top 35 years—are used to calculate benefits at Full Retirement Age (FRA).

Also: Worker credits
For each quarter year of work (above a small minimum income amount), a worker may earn one credit toward becoming fully insured, with a maximum of four credits per year. This means that, generally, it takes about 10 years of covered work history to reach insured status; that is, eligible for a Social Security retirement benefit based on your own work record.

Deemed filing
If a married individual (A) applies for Social Security benefits before own FRA but after spouse (B) has either already "filed and suspended" or has started taking own benefits, individual A will receive the higher of the two benefits for which A is eligible: 1. A benefit based on A's own work history; or 2. A benefit based on the work history of B called a "spousal benefit". In this situation where spouse B has already taken action, spouse A is "deemed to have filed" for the larger of the two benefits.

In contrast, if a married individual A applies for Social Security benefits before own FRA and before spouse B files for own benefits or "files and suspends", then spouse A is only eligible for benefits based on own work history, and is not eligible for spousal benefits until spouse B files or files and suspends. In this situation no "deemed filing" would have occurred.

Delayed retirement
Also: Maximum retirement age
Any applicant who waits until after own Full Retirement Age to start taking own benefits, up to age 70, is considered by the SSA to have delayed his or her retirement.

Delayed retirement credits (DRCs)
If delaying retirement past Full Retirement Age (FRA), you will earn credits on a monthly basis up to age 70 equating to an increase in benefits of about 8% per year, applicable to you and to survivors claiming off your work record. If married and historically the higher wage earner, your surviving spouse will likely receive this amount as his or her survivor benefit, depending on his or her own work history and when he or she initiates his or her own benefits. DRCs do not apply to spousal benefits.

Early retirement
Also: Minimum retirement age
Benefits initiated before Full Retirement Age (FRA), as early as 62, which will permanently decrease your Social Security benefits by about 7% to 8% per year.

Earnings record
See: Covered wages

Earnings test
See: Retirement earnings test

Also: Eligibility
Individual is qualified to receive a particular type of benefit at a particular time, subject to eligibility rules such as work history, age, or marital status. Workers are eligible to receive Social Security benefits based on their own work history if they have worked and paid into the system for 40 quarters (i.e., usually 10 years) or more.

Also: Proofs; documentary evidence
Documents required to establish entitlement or payment amounts, such as your Social Security card, original birth certificate, proof of U.S. citizenship, copy of most recent tax returns, marriage certificate for spousal benefits, or death certificate for survivor benefits.

File and suspend
When one spouse files for his or her Social Security benefit and then immediately suspends receipt of the benefit. This option can only be taken at or after Full Retirement Age (FRA). This strategy enables the other spouse to be eligible to file for spousal benefits.

Full Retirement Age (FRA)
Also: Normal retirement age (NRA)
The focal point for Social Security benefit calculation: age 66 for those born in 1943 through 1954; between ages 66 and 67 for those born in 1955 through 1959; and age 67 for persons born in 1960 or later.

Fully insured
See: Insured status

Government Pension Offset (GPO)
Spouses, ex-spouses, and widow(er)s claiming spousal benefits on the work records of government employees who were not covered by Social Security but instead under an alternate pension are only eligible for Social Security benefits that exceed an offset of two-thirds of the alternate pension amount being received. Example: Social Security benefit would have been $2,000 a month, but they are receiving $1,800 a month from an alternate pension; two-thirds of $1,800 is $1,200; Social Security benefit will be reduced by that amount to $800 per month. See: Windfall Elimination Provision (WEP)

Indexed earnings
Years of covered work history are adjusted (indexed) for inflation to today's dollars; these adjusted figures are used in benefit calculation, generally based on the top 35 years. Working longer can increase benefits by replacing low earning or zero years. See: Benefit calculation

Insured status
Once a worker has earned 40 worker credits (generally about 10 years of covered work history), he or she is considered fully insured for retirement benefits on his or her own work record; insured status is either "insured" or "uninsured."

Letter of Determination (confirms award amount)
Confirms award of a Social Security benefit and inclusion on the payment roles, including the amount to be paid.

Maximum retirement age
See: Delayed retirement

Maximum taxable earnings
See: Wage base

Minimum retirement age
See: Early retirement

Month of election
You may be able to specify not only the year but also the month you want to initiate your Social Security retirement benefits (you don't have to wait until the next calendar year), since benefit amounts are determined on a monthly basis. Any reduction for early retirement or delayed retirement credits earned that increase your benefits are applied on a monthly basis.

Normal retirement age (NRA)
See: Full Retirement Age (FRA)

Number holder
Also: Worker
In other words, the Social Security number holder; the worker on whose covered work history the Social Security benefit is to be based.

Old-Age, Survivors, and Disability Insurance (OASDI)
The Social Security program, which pays four types of monthly benefits, based on your own or your spouse's/ex-spouse's work record: retirement (including spousal) benefits; survivor benefits; family benefits; disability benefits.

Old-age benefit
An analogous term for Social Security retirement benefits sometimes used by the Social Security Administration.

Primary Insurance Amount (PIA)
The amount a worker would receive at his or her Full Retirement Age (FRA), permanently increased for delayed retirement or permanently decreased for early retirement; the basis for any spousal benefits.

See: Evidence

Provisional income
See: IRS Publication 915, Worksheet 1. Calculated amount that, along with filing status, determines how much of your Social Security benefits are required to be entered as federally taxable income. Amount is equal to half of your Social Security benefit plus your modified adjusted gross income, or MAGI (i.e., adjusted gross income plus tax-exempt interest).

Quarters of credit
Previously known as quarters of coverage. For each quarter year of work earning covered wages above a low minimum amount, you earn one worker credit toward becoming fully insured. See: Worker credits

See: Beneficiary

Reset of benefits
Also: Withdrawal of application
Also known as withdrawal of application; "the do-over option." If you initiated your benefits within the last 12 months and want to change your mind, you may reset your benefits to what they would have been at a later initiation date by withdrawing your application, paying back all the benefits you've received to date, and then reapplying at that later initiation date. You may only do this once in your life.

Restrict application
Also: Restrict the scope of
the application
When a beneficiary is entitled to more than one benefit type (i.e., benefit based on own work history vs. benefit based on spouse's work history). Once that individual reaches own FRA and his or her spouse has either already filed for own benefits or has filed and suspended, that individual may specify the benefit type being applied for (i.e., spousal benefit) at the exclusion of any other available benefits and then apply for a different benefit type later — usually his or her own benefit at age 70.

Retirement earnings test
If receiving benefits before Full Retirement Age (FRA) and still working, if making over a certain threshold amount (adjusted annually) this calculation may result in the SSA temporarily withholding some of your Social Security benefits, which are repaid to you gradually once you attain FRA. Once you attain your FRA, the earnings test no longer applies and you may earn as much as you wish without any of your benefits being withheld.

Spousal benefits
One spouse is considered "spouse" and the other the "worker" for this purpose, even if both have worked. If eligible, one "spouse" is allowed to collect between 35% and 50%, depending on age when initiated, of the "worker's" Primary Insurance Amount (PIA). The "worker" must have already filed for own benefits or have filed and suspended. The "spouse" does not receive a greater benefit for delaying spousal benefits past their own Full Retirement Age (FRA).

Survivor benefits
Also: Widow(er) benefits
Benefits based on the deceased's covered work history paid to the surviving spouse if greater than the surviving spouse's own benefit. This depends on the Primary Insurance Amounts (PIAs) and age initiating benefits of each spouse, as well as the age at death of the predeceasing spouse if under age 70.

Suspend and recalculate benefits
If you initiated your benefits more than 12 months ago but now want to receive higher benefits by delaying future benefits, once you reach your FRA or older you may request that the SSA suspend receipt of any more benefits until up to age 70 in order to earn delayed retirement credits on your current benefit amount. The SSA will recalculate your benefit amount when you file again for benefits — usually at age 70.

Social Security statements
Contains an estimate of benefits based on your work history if initiated at the minimum age 62, your Full Retirement Age, or the maximum age 70. You may access your statement on the Social Security Administration website: socialsecurity.gov/mystatement/.
Taxable earnings/taxable wages
See: Covered wages

Taxable limit; taxable maximum
See: Wage base

Taxation of benefits
Under current legislation, most states do not tax Social Security income and the amount of your Social Security benefits that must be included in federally taxable income ranges from 0% to 85%. This amount depends on your tax filing status and provisional income, which includes other taxable income you may receive from sources like wages; IRA and 401(k) withdrawals; and tax-exempt interest, dividends, and benefits. Qualifying Roth IRA withdrawal income is tax-free and will not cause Social Security benefits to be taxed.

Trust funds
There are two Social Security trust funds, which are accounts in the U.S. Treasury that receive taxes on covered wages to fund certain benefits paid by OASDI. One fund holds the assets needed to pay disability claims and the other fund provides for all other Social Security benefits.

Unreduced benefits
Retirement, spousal, and survivor benefits that are not reduced by actuarial formulas for early retirement because they are initiated at or after attainment of the applicant's Full Retirement Age (FRA).

Voluntary tax withholding
An optional withholding of a percentage of your Social Security benefits—7%, 10%, 15%, or 25%—as prepayment of tax, facilitated by filing IRS Form W-4V. Some may find this easier than paying quarterly estimated tax payments.

Wage base
Also: Maximum taxable earnings,
annual maximum taxable limit;
maximum earnings; taxable limit
The maximum annual amount of earnings to which Social Security payroll tax (FICA or SECA) applies and on which Social Security benefits are based. The cap amount is indexed annually for inflation.

Widow(er) benefits
See: Survivor benefits

Windfall Elimination Provision (WEP)
Governmental and civil service employees who were not covered by Social Security but instead under an alternate pension may have Social Security retirement benefit amounts reduced under an alternate formula applied to the normal benefit calculation. See: Government Pension Offset (GPO)

See: Number holder

Worker credits
Also: Credits
For each quarter year of work (above a small minimum income amount), a worker may earn one credit toward becoming fully insured, with a maximum of four credits per year. This means that, generally, it takes about 10 years of covered work history to reach insured status; that is, eligible for a Social Security retirement benefit based on your own work record.

Zero year
A year in which no worker quarters of credit were earned toward Social Security; working longer can replace low or zero years in the benefit calculation and increase benefits. See: Benefit calculation