Retirement calculator glitch gave misleading information, senators say

Retirement

Retirement calculator glitch gave misleading information, senators say

The chairmen of two Senate financial committees claim an agency's online retirement planning calculator misled seniors about how much they could expect to receive...

Jory Heckman@jheckmanWFED

January 7, 2016 12:43 pm

2 min read

The chairmen of two Senate financial committees claim an agency’s online retirement planning calculator misled seniors about how much they could expect to receive in retirement benefits.

Sens. Mike Enzi (R-Wyo.), chair of the Senate Budget Committee, and Richard Shelby (R-Ala.), chair of the Senate Committee on Banking, Housing and Urban Affairs, claim the Consumer Finance Protection Bureau gave prospective retirees inconsistent data about their expected monthly Social Security benefits.

“These differences appear to be magnified for individuals close to retirement for whom this information matters the most,” the senators wrote in a December letter to CFPB Director Rich Cordray. “If the CFPB is to fulfill its own stated mission of ’empowering consumers to take more control over their economic lives,’ then it must provide clear and accurate information for Americans making important financial decisions.”

Among their questions, Enzi and Shelby asked why CFPB put a retirement planner on its website in the first place, since the Social Security Administration already has a calculator on its website.

The Enzi-Shelby letter said the CFPB calculator overestimated early retirement benefits and underestimated benefits for those planning to retire at age 70.

The senators asked the CFPB for an explanation for the calculator’s misleading estimates. They also wanted to know how much money and planning went into the online planner.

The bureau’s calculator, which launched in November 2015, gives retirees a side-by-side comparison of the pros and cons of retiring at various ages.

A disclaimer on the CFPB’s retirement website claims the calculator bases its benefit estimate “on current formulas from the Social Security Administration.” It also cautions that the tool provides only “rough estimates” of a retiree’s Social Security benefit based on earnings information provided by the user.

SSA’s retirement calculator gives more accurate results that are based on a retiree’s actual Social Security earnings record.

A CFPB spokesman on Wednesday said the agency has received the Enzi-Shelby letter and is preparing a response in time for the letter’s Jan. 31 deadline for information.