How to know how much will I get in Social Security when I retire?
Retirement benefits are by far the most extensive of the support programmes offered by the SSA but working out your potential entitlement can be confusing.
Of the 70 million people who receive Social Security support every month, around 50 million of them are receiving retirement benefits. This makes the Social Security retirement benefits one of the most widely used support programmes in the United States.
The amount that each recipient received is specific to them and is based on a number of factors, such as:
- Earnings history
- Age at which they first claims Social Security payments
- Eligibility for cost-of-living benefits increases
- Eligibility for a government pension
To estimate how much you will get in benefits when you choose to claim, you can do so with the Social Security retirement calculator. However bear in mind that this is simply an estimate and is subject to change.
When you do come to claiming the benefits for real the Social Security Administration (SSA) will look back on the entirety of your working life to make an assessment on the size of payment you are eligible for.
How are Social Security retirement benefits calculated?
All the information related to any future Social Security claims can be found by accessing your mySocialSecurity account online, which will show an estimate of your personal retirement benefits. It will also give an idea of how different potential retirement age scenarios would affect your payments.
Social Security can seem like a bit of a mystery as your entitlement is accrued over time and can be affected by various things. According to the SSA, your retirement benefits will be primarily based on your lifetime earnings.
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They then adjust your actual earnings to reflect the changes in average wages since you received them to ensure that historic earnings are assessed fairly. From this, and using all previous annual income reports, the SSA will calculate each individual’s average indexed monthly earnings across the 35 highest-earning years. This is designed to find a fair assessment for your average lifetime earnings.
With this average, the SSA then applies a formula to arrive at the claimant’s basic benefits level, also known as the primary insurance amount.
Even now the process is not complete, as the actual size of the benefits payment issued will then depend on when the recipient chooses to start receiving the support. Claiming before full retirement age will see the size of the monthly payments decrease, but holding off and waiting will see the amount rise.