Social Security Benefit decrease

[RobertB85730]

I’m currently 67 years old and waiting until age 70 to claim my retirement benefits from Social Security. On my most recent Social Security statement (2023) my age 70 monthly benefits decreased by 74 dollars a month from my 2022 statement versus 2023. I had $4,273 in earnings in 2022. Does this make any sense or should I be contacting the Social Security Administration? 

[Tonster521]

@RobertB85730 I would not contact the SSA regarding an estimate. Whether from your SS Statement or the online calculator, it is just an estimate. The key word is estimate. Remember, your SS Benefit is not an accrued benefit such as a defined benefit pension from a qualified pension plan wherein federal law protects that accrued retirement benefit. Your SS Benefit is developed using 35 years of indexed earnings (indexing stops upon attainment of age 60). I will try to provide a link that explains your Primary Insurance Amount (PIA) https://www.ssa.gov/oact/cola/piaformula.html#:~:text=The%20%22primary%20insurance%20amount%22%20(,n.... Your SS Benefits is increased if you delay starting your SS Benefit  after your Full Retirement Age (FRA) or decreased if you start your SS Benefit before your FRA. If your estimate decreased, it is related to lower projected earnings. 

[fffred]

@RobertB85730 

The estimated retirement benefit that's given each year on the SSA statement and the My Social Security account, at ages under your FRA (full retirement age), assumes that the remaining working years will have incomes in line with your recent history of wages. It is possible that if someone stops working prior to their FRA (but does not yet take Social Security retirement benefit) that the estimated benefit will later decrease once the "zero wage" years come to pass (the actual wage data for those years is taken into account in the newly updated estimate). I don't have access at this time to such a statement but I recall that there is an explanatory note to this effect in there.

This might explain the drop in your estimated benefit from the 2022 statement if the situation is that the $4,273 earnings for 2022 is substantially less than the earnings in the several previous years.

The situation is very similar to that described in this forum in a recent post, see https://community.aarp.org/t5/Social-Security/I-plan-to-start-SS-at-70-but-retire-at-65-how-does-thi...

Edit:  this effect occurs only for estimates produced when you are below your FRA. I think you must be at the cusp of this; maybe the 2021 statement you were below your FRA and maybe for 2022 you were at or above your FRA. Just guessing. But the point is that once you are above your FRA the lack of wages will no longer have an effect to decrease your estimated benefit. And since you are delaying your claim, your benefit increases at the rate of 8% per year (not compounded). I guess that's 2/3% per month.