The retirement benefit is based on your lifetime earnings in work which paid Social Security taxes.
The retirement benefit is based on your lifetime earnings in work which paid Social Security taxes.
Social Security Benefits
For those thinking about retirement and how much money you will receive, you must know that your benefits are calculated mainly taking into consideration two factors:
- The lifetime earning income in work where you paid Social Security taxes.
- The age that you start claiming your benefits, with the latter being crucial on most occasions.
Earning a high income and working longer translates to a bigger benefit can claim on your retirement.
For reference, the average Social Security payment for retired individuals in 2023 will be estimated worth $1,827 each month, with the maximum being set at $3,627, which is what those who waited until their full retirement age (FRA) are getting.
The full retirement age or FRA is the age at which you qualify for 100 percent of the benefit calculated from your earnings history. FRA is set at 66 years and four months for those born in 1956, while those born in 1957 have 66 years and 6 months, reaching the 67 years mark for those born in 1960 or later. Moreover, between FRA and 70, it increases your payment as a reward for waiting.
An individual can take into account a maximum of $160,200 in income towards his future retirement benefits and this is because the amount is adjusted each year to reflect the historical wage trends, therefore any income above that threshold won’t be counted in the future calculation of benefits, therefore it isn’t subject to Social Security taxes either.
Here’s How To Get An Advance Look For Your Future SS Benefits
To identify your amount for sure when you apply, however, there are ways to get a sense of it in advance. The fastest and most manageable is to use AARP’s Social Security Benefits Calculator or check your online My Social Security account. The latter marks on your earnings record on file with the Social Security Administration for the AARP calculator, you’ll need to provide your average annual income.
You can also get basic benefit estimates by contacting the Social Security Administration at 800-772-1213. But keep in mind, no matter where you get the numbers, they are estimates, not promises. Your actual benefit will differ, perhaps significantly, based on fluctuations in your earnings, cost-of-living adjustments, whether you continue to work after claiming benefits, and changes in the Social Security law.
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