Frequently asked questions

*The results provided by the Personal Retirement Calculator (PRC) are intended for illustrative purposes only and accuracy is not guaranteed. The results should not be relied upon nor should they be deemed as investment advice.

IMPORTANT: The projections or other information generated by the Personal Retirement Calculator regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time.

 

The Personal Retirement Calculator is provided by one or more third party service providers. However, the information generated by the calculator is developed by Merrill to estimate how current savings and estimated future contributions may help to meet estimated income in retirement. The information estimates potential growth of your indicated assets and contributions over the time frame specified. The market return data used to generate the illustration is hypothetical and intended to provide you with a general idea of how an asset mix you selected might perform over time.

 

The respective asset mix may be useful information, but is in no way representative of past performance of a particular investment, and is not representative of any future performance of any particular investment. Numerous factors make the calculations uncertain, such as the use of assumptions about hypothetical returns and inflation as well as the data you have provided. Assumptions concerning inflation are for illustrative purposes only. Any asset or portfolio earnings and/or returns shown or used do not reflect the cost of investing, including commissions or fees.

 

Past performance is not a guarantee of future results.

 

We encourage you to consult with qualified professionals to discuss your situation.

 

Bank of America Corporation and its affiliates are not tax or legal advisors. The PRC is not intended to offer any tax, legal, financial or investment advice and does not assure the availability of or your eligibility for any specific product offered by Bank of America Corporation, its affiliates or any other institution, nor does the PRC predict or guarantee the actual results of any investment product. The terms and conditions of products offered by institutions will differ and may affect the results of the calculator. You shall be fully responsible for any investment decisions you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs. Please consult with qualified professionals to discuss your situation.

 

For more information on the calculations, review our Methodology and Assumptions section below.

 

Social Security Benefits Calculator Methodology & Assumptions

This tool is designed to estimate Social Security benefits for a primary user and a spouse, a comparison of benefits at different claiming ages, as well as an estimate of household benefits to include a surviving spouse. The key aspects of the tool are taken from the Personal Retirement Calculator model but there are additional inputs and results for further analysis of specific Social Security strategies using the same underlying model. The computation is similar to that used by the SSA,gov tool, using an estimated income stream over 35 years to calculate the potential Full Retirement benefit. In addition, the tool allows the user to provide actual FRA projected benefit from their own SSA.gov account, resulting in higher accuracy since their actual earning history is used. For some users, FRA may be rounded when shown in the benefits table but actual calculation of adjustments are from the actual FRA.

 

Assumptions:

• Past and future incomes are projected following the same assumptions as the Personal Retirement Calculator, the calculator does not use actual earnings.
• Children or dependents other than the spouse are not considered.
• The primary user and/or spouse is assumed not to be disabled.
• Spouses from previous marriages are not considered.
• Benefits are assumed to be paid at the beginning of the year. Since FRA can be a number of months into a certain age (66 and 8 months, for example) the tool assumes whole years for simplifying purposes, such as computing reduced or enhanced benefits.
• If claiming at 68, benefits are assumed to be paid at the beginning of the year the primary user or spouse turns 68.
• Benefits are assumed to be paid in the year in which the primary user or spouse passes. Survivor benefits are paid in the year following the year in which the primary user or spouse passes.
• The user is encouraged to change the life expectancy value to see how it affects the age at which you claim benefits.
• The allowed claiming age range is 62 to 70.
• The monthly benefits amount is calculated to FRA and adjusted to when benefits are claimed.
• The estimated lifetime benefits of a filing strategy are in today’s dollars.
• Spousal benefits eligibility assumes the other spouse has started receiving benefits.
• Spousal benefits for the lower earning spouse will be their own benefits or half of the higher earning spouse’s benefits at their full retirement age, whichever is higher.
• The estimated benefits are based on current law. The law governing benefit amounts may change.
• At full retirement age, spousal benefits are 50% of the higher earner’s Primary Insurance Amount (the benefit that they would have received at full retirement age). The higher earner must file and be actively collecting for their spouse to collect spousal benefits. Spousal benefits will be reduced if the lower earner claims before their full retirement age. The spousal benefit does not increase or decrease if the higher earner claims before or after their full retirement age. For example, if 50% of the primary user’s benefits at their FRA is $2,000 and the spouse’s own benefits at their FRA is $900, the spouse’s benefits will be less than $2,000 if the spouse claims before their FRA. Spousal benefits are not eligible for delayed retirement credits (8% annual increase for waiting beyond full retirement age).
• If the spouse claims retirement benefits early before they are eligible for spousal benefits (higher earner has not filed), the reduction for collecting retirement benefits early will be taken into consideration and they will not be able to step up to the full spousal benefit at a later date. For example, spouse’s primary insurance amount is $1,000 and the spousal benefits is $1,200. The spousal collects retirement benefits at age 62 and receives $700. Five years later the higher earner files and begins collecting. The spouse is now age 67 and files for spousal benefits they would step up to $900 not $1,200 since the original reduction would be factored into the equation. The math becomes more complex if the spouse becomes eligible for and files for spousal benefits before full retirement age since the spousal benefits would also be reduced.
• Survivors are eligible to receive survivor benefits starting at age 60 but the tool assumes earliest claiming age of 62.
• If the surviving spouse is eligible for survivor benefits before the specified claiming age for own benefits, the tool calculates survivor benefits before the specified claiming age and uses the higher survivor and own benefits after the claiming age.
• The tool does not account for taxes on Social Security benefits. Other income besides Social Security benefits is not considered to be able to calculate taxes. This includes employment income of either spouse or taxable income in retirement such as RMDs or withdrawals from tax-deferred accounts.