How to find SS indexing formula and change tax withholding on Social Security benefits?
I'm trying to understand how Social Security calculates my benefit and need help with two things. 1) I read somewhere that SS uses some formula that adjusts your past earnings to account for inflation before calculating benefits. They call it 'indexing' I think? How can I find out what these adjustment factors are for each year? I want to double-check their calculations since I worked for 42 years and want to make sure all my earnings are being counted correctly. 2) I also need to increase the amount of federal tax being withheld from my monthly SS payment. The current withholding isn't enough and I don't want a big tax bill next April. Is there a specific form for this? I looked at my mySocialSecurity account but couldn't find anything about changing withholding. Thanks for any help!
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Paolo Marino
For your first question, you're looking for the "Average Wage Indexing Series" that SSA uses to adjust your past earnings. You can find the official indexing factors on the SSA website here: https://www.ssa.gov/oact/cola/AWI.html For changing your tax withholding, you need Form W-4V (Voluntary Withholding Request). You can choose to have 7%, 10%, 12%, or 22% of your monthly benefit withheld. You can download it from the IRS website or call SSA to have one mailed to you.
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StardustSeeker
•Thank you so much! That indexing page is exactly what I was looking for. One more question - once I fill out that W-4V form, do I mail it to my local SSA office or is there a specific processing center I should send it to?
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Amina Bah
I went thru this last yr!! The W-4V is what u need for changing withholding. I had to increase mine too cuz I got hit with a BIG tax bill. You can only choose those specific percentages they mention tho - no custom amounts. Just FYI.
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StardustSeeker
•Thanks for confirming! Did you mail your form or take it to the local office? I'm wondering which is faster.
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Oliver Becker
For the indexing factors, use this specific calculator: https://www.ssa.gov/OACT/anypia/anypia.html It's called "Detailed Calculator" and it's much more precise than the quick calculators. It lets you enter your entire earnings history and applies all the correct indexing factors automatically. You'll need to download it to your computer. Regarding tax withholding, I recommend taking the W-4V form directly to your local office rather than mailing it. Make a copy before submitting it and get a receipt. The processing time is typically 30-45 days before the new withholding rate takes effect.
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Natasha Petrova
•Is that calculator really accurate?? My brother used it and said his actual benefit ended up being $237 less than what the calculator estimated. Something about WEP that wasn't factored in???
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Oliver Becker
•Great point. The Detailed Calculator will be accurate for most people, but you're absolutely right that it doesn't automatically account for WEP (Windfall Elimination Provision) or GPO (Government Pension Offset). If you ever worked at a job where you didn't pay Social Security taxes (some government jobs, foreign employment, etc.), you'll need to use the WEP calculator instead: https://www.ssa.gov/international/wep_web_calc.html
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Javier Hernandez
Trying to reach someone at SSA to get that W-4V form was a nightmare for me. Spent two hours on hold and then got disconnected THREE times. I finally used a service called Claimyr (claimyr.com) that got me through to a real agent in under 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU Definitely worth it for me since I was able to get the tax withholding changed before the next payment. Otherwise I would have been stuck with the wrong withholding for another month.
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Emma Davis
•I was just about to suggest this! SSA phone lines are IMPOSSIBLE these days. I used Claimyr too when I needed to fix an issue with my direct deposit information. Got through in about 15 minutes when I had previously wasted an entire morning trying to reach them.
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StardustSeeker
•Thank you for suggesting this. I'll check it out if I have trouble getting through. I've been trying to avoid calling since the wait times are so bad.
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LunarLegend
you can also downlod the w4v form online right from irs.gov without calling anyone. just google "w4v pdf" and it comes right up. this is what i did last month.
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StardustSeeker
•Good suggestion, I'll do that. Seems easier than waiting for them to mail it.
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Natasha Petrova
Has anyone else noticed that the SS calculator always seems to overestimate benefits??? When I was getting ready to claim last year, the estimate was almost $300 higher than what I'm actually getting now. Super frustrating!!!
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Oliver Becker
•That's unusual. The Detailed Calculator is normally very accurate if you input your entire earnings history correctly. The Quick Calculator can be off because it estimates your future earnings. If there's a $300 difference, I'd suggest scheduling an appointment with SSA to review your calculation. There might be an error in how your earnings record is being calculated or you might be affected by WEP/GPO.
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Natasha Petrova
•Oh I didnt know about the detailed one. I just used the one on mySocialSecurity. Maybe thats why. I worked for a school district for 8 years so maybe thats the WEP thing???
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Amina Bah
For the indexing thing - just know that they only use your highest 35 years of earnings when figuring ur benefit. If u worked 42 yrs like u said, they'll throw out ur 7 lowest-earning years. Also they adjust all those earnings to current dollars befor calculating. its complicated!!!
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StardustSeeker
•Thanks, that's helpful to know. I had a few years early in my career with very low earnings, so I'm glad those won't drag down my benefit amount.
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Emma Davis
I had a similar situation with the tax withholding issue. I'd recommend selecting the 12% option on the W-4V unless you have significant other income. The 7% is rarely enough to cover the tax liability for most retirees with pension or investment income. After you submit the form, you can check your mySocialSecurity account about 30-45 days later to verify the new withholding amount is being applied correctly. Regarding the indexing factors, it's also worth knowing that earnings after age 60 aren't indexed (they're counted at face value), which can make understanding the formula a bit confusing.
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StardustSeeker
•That's really good information about the 12% - I was planning to just choose 10% but maybe I should go higher. I do have some investment income and a small pension. And I didn't know about the age 60 cutoff for indexing - thank you!
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