Your earnings depend on many factors
Calculating Social Security Payments
Two main factors affect the amount you can earn from social security: your earnings throughout your life before retirement and the waiting period before you start receiving payments. Social security benefits are based on the income you have earned over your lifetime, and are adjusted for changes in average wages since that amount was first achieved. The average indexed monthly earnings are then calculated using the highest 35 years of earnings. From this amount comes your primary benefit. It is difficult to predict exactly how much you will receive from social security when you retire because the government can adjust the benefit levels. However, if you are interested in knowing how much you might receive from social security, the government provides a quick calculator that can give you an approximate estimate. The results depend on your current income and your birth date. You can view the results in current dollars or future inflated dollars.
Women and racial minorities generally earn less
Unfortunately, women generally receive a lower monthly benefit than men. This is due to income levels, as women have historically earned less than men. In 2019, women aged 65 and older received an average annual income from social security of $13,505, compared to $17,374 for men. This equates to about $1,125 monthly for women and about $1,447 monthly for men. The U.S. Social Security Administration indicates that these lower benefits are associated with lower lifetime earnings and more part-time work. You should keep in mind that the further you are from retirement age, the greater the potential inaccuracies in the calculations.
It’s better to wait
The longer you wait to collect benefits, the higher your benefit will be based on the payment structure provided by social security. Therefore, if you have enough savings for retirement, you might be able to wait several years before you start receiving social security benefits. You can begin receiving social security benefits at age 62. However, if you retire at that age, you will only receive a percentage of the maximum retirement benefit. For example, if you were born in 1960 or later and retire at age 62, you will only receive 70% of the maximum benefit. If you wait until age 65, you will receive 86.7%, and if you start receiving benefits at age 67, you will receive the full benefit. Spousal benefits range from 32.5% to 50%, depending on the age of receipt.
Conclusion
It is difficult to know exactly how much you will receive from social security until you start receiving payments. However, you can work to maximize your payments by earning as much as possible in the years before retirement and delaying receipt as long as possible. While the average social security benefit was $1,562.66 per month in 2021, it is possible to earn more than double that amount each month by combining higher lifetime earnings with patience.
Frequently Asked Questions
What is the average social security salary for the disabled?
The average monthly benefit payment for retirees was around $1,300 in November 2021. This reflects an increase of about $200 from the average monthly retirement benefit in November 2011.
What is the maximum amount for social security benefits?
The maximum amount of retirement payments from social security varies based on factors such as retirement age, the amount you earned during your lifetime, and inflation in a given year. For 2022, the maximum benefit for those retiring at age 70 is $4,194.
Source:
https://www.thebalancemoney.com/how-much-is-the-average-social-security-check-4774723
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