Your estimated Social Security benefit: That’s not what you’ll actually get
When you receive your Social Security benefit estimate in the mail, or even if you look at it in your My Social Security online account, don’t be fooled into thinking that is the exact amount you will be receiving. The benefit amount shown is just what it says it is – an estimate. If you’re looking at it years before your full retirement age, then to come up with a number Social Security assumes you will continue to earn as much as you did on your last income tax return up until you reach your full retirement age. If you earn less then your actual benefit will be smaller; if you earn more in your later years, it could be higher. Then too, the estimate is only a gross figure; it doesn’t take into account any deductions that might occur, such as for your Medicare premiums or even for withheld taxes. This Motley Fool article by Wendy Connick explains.