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How Much Social Security Would I Get

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Adjust All Of Your Annual Earnings For Inflation

How Much Social Security Will I Get?

Unless youre retiring this year, your future payouts will need to factor in inflation in the years between now and retirement age. The Social Security Administration uses the national average wage indexing series to calculate benefits for retirees, adjusting earnings to account for inflation in the years prior to retirement.

Your Social Security retirement earnings will be adjusted to the average wage two years prior to retirement, attached to taxes taken out with your SSN throughout your lifetime. In 2019, that average wage was $54,099.99, so someone retiring in 2021 will be indexed on that. The IRS will take $54,099.99 and multiply it by the wage ratio for each year prior to that to come up with a wage for every year worked. The Social Security Administration maintains this wage ratio, which is based on the National Average Wage Indexing Series, available here. You can perform this calculation yourself or go to the Social Security website and input the year you plan to retire at the bottom. That will give you the estimated indexing factors for each year going back to your year of birth.

Who Can Use The Retirement Estimator

You can use the Retirement Estimator if you have enough Social Security credits to qualify for benefits and you are not:

  • Currently receiving benefits on your own Social Security record.
  • Waiting for a decision about your application for benefits or Medicare.
  • Age 62 or older and receiving benefits on another Social Security record.
  • Eligible for a Pension Based on Work Not Covered By Social Security.

If you are currently receiving only Medicare benefits, you can still get an estimate. For more information, read our publication Retirement Information for Medicare Beneficiaries.

If you cannot use the Retirement Estimator or you want a survivors or disability benefit estimate, please use one of our other benefit calculators.

Maxing Out On Social Security

Many people who earn $120,000 will have similarly high incomes going back in time. If that’s the case, then there’s a possibility that you’ll earn at or above the maximum wage base limit each and every year for 35 years. For those people, Social Security gives you an easy answer for what to expect from benefits by providing the maximum possible monthly benefit.

For someone retiring at full retirement age in 2016, the maximum benefit would be $2,639 per month, again assuming that you had 35 years of earnings that maxed out Social Security payroll taxes. Those figures differ slightly every year, because of changes in the wage base maximum and any cost of living adjustments that might apply. For 2015, for instance, the corresponding maximum was $2,663, and the 2014 maximum was $2,642.

If you retire at a another age, your benefit will be different. For example, someone turning 62 in 2016 and taking Social Security will receive just $2,102 per month. If you wait longer to get benefits, you’ll get even more. The maximum for someone taking benefits at age 70 in 2016 is $3,576 per month.

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How Social Security Works

Qualifying for Social Security in the first place requires 40 work credits or approximately 10 years of work. If you have 40 work credits, you are eligible to claim Social Security once you reach age 62. Your FRA, however, depends on the year of your birth.

For example, if you were born in 1960 or later, your FRA is 67 if you were born between 1943 and 1954, it is 66. You will receive 100% of your benefits if you wait until your FRA to claim them. If you claim earlier, you will receive less. If you claim at age 70, you get an 8% bonus for each year that you delayed claiming.

Social Security benefits are calculated by combining your 35 highest-paid years . First, all wages are indexed to account for inflation. Wages from previous years are multiplied by a factor based on the years in which each salary was earned and the year in which the claimant reaches age 60. This calculation gives an amount comparable to buying power based on the current value of the dollar. Accounting for this valuation change is important, because a salary of $14,000 was far more impressive in 1954 than it is today.

Once all wages have been indexed, the average indexed monthly earnings is computed by dividing the sum of all indexed wages by 420 . The benefit amount is then calculated based on factors that include the year in which collection begins, whether the claimant has reached FRA, and whether the claimant continues to work while collecting benefits.

You Can Claim Social Security Benefits Earned By Your Ex

How Much Will I Get From Social Security If I Make ...

Just because you’re divorced doesn’t mean you’ve lost the ability to get a Social Security benefit based on your former spouse’s earnings record. You can receive a benefit based on his or her record instead of a benefit based on your own work record if you were married at least 10 years, you are 62 or older, and single.

Like a regular spousal benefit, you can get up to 50% of an ex-spouse’s benefit — less if you claim before full retirement age. And the beauty of it is that your ex never needs to know because you apply for the benefit directly through the Social Security Administration. Taking a benefit on your ex’s record has no effect on his or her benefit or the benefit of your ex’s new spouse. And unlike a regular spousal benefit, if your ex qualifies for benefits but has yet to apply, you can still take a benefit on the ex’s record if you have been divorced for at least two years.

Note: Ex-spouses can also take a survivor benefit if their ex has died after the divorce, and, like any survivor benefit, it will be worth up to 100% of what the ex-spouse received. If you remarry after age 60, you are still eligible for the survivor benefit.

A claiming strategy if youre divorced: Exes at full retirement age who were born on January 1, 1954, or earlier can apply to restrict their application to a spousal benefit while letting their own benefit grow.

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How Much Will My Spouse Receive

If your spouse qualifies for benefits on their own record, the SSA will pay that amount first. If the benefit on your record is higher, they will get an additional amount on your record so that the combination of benefits equals that higher amount.

If they begin receiving benefits:

  • If your spouse is under full retirement age and:
  • Works while receiving benefits, their benefits may be affected by the retirement earnings test.
  • Also qualifies on their own record, their application will include both benefits.
  • At their full retirement age, the spouses benefit cannot exceed one-half of your full retirement amount.
  • More about spouse social security retirement benefits.

    Social Security Facts Eligibility & How Much Social Security Will I Get

    • Some American employees do not qualify for Social Security retirement benefits.
    • Employees who have not received the required 40 credits are eligible for Social Security.
    • Some government employees and railways are eligible for Social Security.
    • Retired American immigrants and some retired immigrants to the U.S. unable to collect Social Security benefits.
    • Divorced spouses who have been married for less than 10 years cannot claim benefits based on their ex-spouses income.

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    How Do You Calculate Your Own Social Security Payment

    Now that we have talked about the average Social Security check, you are probably wondering how you can determine how much your own personal benefit will be. That requires digging a little deeper into the question, How is Social Security calculated? There are several factors that go into calculating your specific payment.

    There are also many steps that go into the overall calculation. Youll need to calculate your average indexed monthly earnings , determine your bend points, factor in any adjustments to your primary insurance amount , and a few other things. This might seem overly complicated, but we plan to spell it out for you so that it is easy to understand. Take things one step at a time, and you are sure to reach a result that is very close to your actual payment amount.

    How To Receive Federal Benefits

    Social Security – How much can I expect to receive

    To begin receiving your federal benefits, like Social Security or veterans benefits, you must sign up for electronic payments with direct deposit.

    If You Have a Bank or Credit Union Account:

    • Call the Go Direct Helpline at .

    If You Don’t have a Bank or Credit Union Account:

    Make Changes to an Existing Direct Deposit Account:

    Learn how to make changes to an existing direct deposit account. You also may contact the federal agency that pays your benefit for help with your enrollment.

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    The Downside Of Claiming Early: Reduced Benefits

    Consider the following hypothetical example. Colleen is 62 as of 2022. If Colleen waits until age 67 to collect, she will receive approximately $2,000 a month. However, if she begins taking benefits at age 62, she’ll receive only $1,400 a month. This “early retirement” penalty is permanent and results in her receiving up to 30% less year after year.

    However, if Colleen waits until age 70, her monthly benefits will increase another 24% over what she would receive at her FRA, to a total of $2,480 per month.1 If she were to live to age 89, her lifetime benefits would be about $112,000 more, or at least 24% greater, because she waited until age 70 to collect Social Security benefits.2

    The Social Security Formula

    If you want to know how your Social Security benefits are calculated or you want to do some math on your own, there is a formula that is used to figure your benefits. Your 35 highest-paid working years are added up with inflation accounted for, then divided by 420 . If you worked less than 35 years, a zero amount is averaged in for each missing year.

    For example, if Jon earned $50,000 for 35 years but was laid off for three of those years making no income. His average earning over 35 years would be around $45,714. He would need to work three extra years so Social Security wont zero-out those three years Jon was unemployed.

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    What Are Some Tips To Maximize Your Social Security Benefit

    Navigating Social Security income can be complicated, but there are strategies to maximize your Social Security benefits, said Greg Middendorf, CFP, of HCM Wealth Advisors. Here is Middendorfs advice:

    1. Work at least 35 years: The Social Security Administration looks at your average monthly income over your 35 highest-earning years when calculating your benefit, Middendorf said. You can still get checks even if you didnt work that long, but you might be disappointed in the amount. Those who havent worked for at least 35 years have zero-income years included in their benefit calculation, and even one of these can significantly reduce your checks.

    Read: Social Security Cost-of-Living Adjustments Arent Enough to Pay Higher Costs for Seniors

    2. Check your earnings record: at least once per year to make sure that everything there appears accurate, he said. Just remember the figures listed there show what youve paid Social Security taxes on, which isnt always the same as your income. In 2021, for example, you only pay Social Security taxes on the first $142,800 you earn. In prior years, this number was lower. So high earners may find their earnings record doesnt reflect their income at all, but it could still be correct.

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    Employees Who Die Before The Age Of 62

    How much will I get from Social Security if I earn $100,000?

    The minimum age to claim Social Security retirement benefits is 62. If a person dies young, dependent children and spouses may be entitled to the benefits of survivors. At age 60, for example, widows and widowers can start receiving Social Security benefits based on their deceased spouses income record . Patients who are terminally ill can apply for SSDI, which means they will still receive some benefits from their contributions to the program.

    What if you have a terminal illness and are approaching retirement age? If you are single, applying for a job right away can be a daunting task. However, if you have a partner, postponing can give your spouse great benefits. Spouse income can be up to 50% of the employees income, depending on the spouses retirement age and whether the spouse is eligible for retirement benefits based on his or her income record. The Social Security Administration has an online calculator that helps determine marital benefits.

    If you do not qualify for Social Security payments, you will need to make sure you have enough money to support your life when you retire.

    Recommended Reading: Social Security Benefits At Different Ages

    How Is Social Security Calculated

    To determine your monthly benefits, the Social Security Administration uses a series of somewhat complicated calculations. At their heart is an inflation-adjusted average of your monthly income from your highest earning years.

    This monthly average is run through an income replacement formula that determines your base monthly Social Security payment rate in retirement. This base rate will then be adjusted upward or downward depending on a few factors, like your age when you start claiming Social Security benefits, your employment status in retirement, your tax bracket and your Medicare premiums.

    If that sounds overly complex, dont fret. Heres how each part of the Social Security calculation breaks down.

    Children Can Collect Social Security Benefits Too

    Minor children of Social Security beneficiaries can be eligible for benefits. Children up to age 18 and disabled children older than 18 may be able to receive up to half of a parent’s Social Security benefit. The disability must have occurred before the age of 22. As long as the disability prevents the person from working, the adult child can continue collecting the benefit even after the parent has died.

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    Whats Full Retirement Age

    Full retirement age is when youre eligible to receive full Social Security benefits. Your full retirement age depends on your birth year: Under current law, if you were born in 1951 or later, your full retirement age is now some point after age 65all the way up to age 67 for those born after 1959. If you were born before 1951, youve already reached age 66 and full retirement age.

    Retirement ages for full Social Security benefits

    If you were born in

    Your full retirement age is

    1950 or earlier

    How Can I Find Out More About Ssdi

    How Much Money Will You Get From Social Security?
    • Visit www.ssa.gov online choose disability, then select publications
    • Visit ssabest.benefits.gov to learn about Social Security benefits you might be eligible for including SSDI
    • Go to your nearest Social Security office

    You can find out how much you would get from SSDI by looking at your Social Security statement. The statement shows your work history and an estimate of what your benefits would be at this time. To get a Social Security statement:

    • Request a statement online through Social Securitys website at www.ssa.gov. Click on My Social Security on the left side of the page.

    Note that SSDI is different from SSI . SSI is for low-income people who didnt pay enough into Social Security during their working years, or who havent worked recently enough to qualify for SSDI. See our information on Supplemental Security Income for more. To get SSI or SSDI, a person must meet Social Securitys definition of disability.

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    Find The 35 Highest Inflation

    If you worked more than 35 years, your benefits will be based on your highest 35 years of earnings. This amount will be indexed to adjust for inflation. If you didnt work for a full 35 years, a 0 will be used for years you didnt work, which will reduce your overall payout.

    Using this Social Security retirement calculator, you can see how working a few more years can help boost your Social Security earnings. For those who worked 32 years, another three years of strong annual wages can make a big difference in your monthly payout once you retire. For many people, wages increase with age, which means your highest earning years will occur in your fifties and sixties.

    Can You Receive Retroactive Payments

    Once the SSA approves your SSDI application and calculates your monthly benefit, you may be entitled to a back pay award. How many months of payments you will receive will depend on the date you applied for benefits and your disability onset date.

    If you are applying for SSDI benefits, you need the assistance of a skilled Social Security disability lawyer to get your application approved and receive the benefits you deserve. To schedule a free consultation with a member of our legal team, fill out the online form on this page or call our Roswell office today.

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