{"id":9659,"date":"2019-09-27T13:17:57","date_gmt":"2019-09-27T18:17:57","guid":{"rendered":"http:\/\/blog.uwsp.edu\/cps\/?p=9659"},"modified":"2019-12-17T12:59:35","modified_gmt":"2019-12-17T18:59:35","slug":"social-security-benefits-how-much-do-you-get","status":"publish","type":"post","link":"https:\/\/blog.uwsp.edu\/cps\/2019\/09\/27\/social-security-benefits-how-much-do-you-get\/","title":{"rendered":"Social Security Part 4: Benefits \u2013 How Much Do You Get?"},"content":{"rendered":"\n

You won\u2019t get rich on Social\nSecurity benefits; the estimated 2019 benefits from the Social Security\nAdministration are below. Social Security helps, but it will\nnot typically provide all the money that is needed in retirement.  Currently, the Social Security Administration\nestimates that Social Security (retirement benefits) replaces about 40% of an\naverage (middle income) wage earner\u2019s income after retiring; retirees generally\nneed at least 70% of work income to live comfortably in retirement.<\/p>\n\n\n\n

The Social Security Administration uses a pretty elaborate\nformula to determine your retirement benefit. Basically, what your benefit is\nat retirement is a function of what you earned over your lifetime. Here\u2019s a\nbrief summary of attempting to explain the steps as to how a retirement benefit\n(officially called the \u201cprimary insurance amount\u201d) is calculated by Social\nSecurity.<\/p>\n\n\n\n

  1. Your historical actual earnings are\nadjusted or \u201cindexed\u201d to make past earnings reflect what they would be in\ncurrent dollars. (Only earnings at or below the salary limit for Social\nSecurity taxes are considered each year.)<\/li>
  2. Then Social Security calculates your\naverage indexed monthly earnings (AIME) during the 35 years in which you\nearned the most. The calculation is done by adding all 35 years of indexed\nearnings together, dividing by 35 to find your annual average, and dividing\nthis result by 12 to determine your lifetime monthly average.  <\/li>
  3. A fairly complex formula is applied\nto these earnings to arrive at your basic \u201cfull\u201d benefit. This is how much you\nwould receive at your full retirement age \u2014 65 or older, depending on your date\nof birth as explained earlier. The formula used depends on the year that a\nperson becomes eligible to receive retirement benefits (when they turn 62).<\/li>
  4. For 2019, the retirement benefit is\ncalculated as:
    1. 90% of the first $926 of a person\u2019s\nAIME, plus<\/li><\/ol>
      1. 32% of AIME greater than $926 but less\nthan $5,583 <\/li><\/ol>
        1. 15% of AIME greater than $5,583<\/li><\/ol><\/li><\/ol>\n\n\n\n

          Hey, it\u2019s complicated. A little easier approach for estimating\nyour retirement benefit is to create an online account directly (called \u201cmy <\/em>Social Security\u201d) with the Social\nSecurity Administration. The Social Security Administration currently mails\nSocial Security<\/em> Statements<\/em> to workers age 60 and over who\naren\u2019t receiving Social Security benefits and do not yet have a \u201cmy<\/em>\nSocial Security account\u201d; statements are mailed three months prior to a\nperson\u2019s birthday<\/p>\n\n\n\n

          Creating a my<\/em> Social Security account with the Social Security Administration: Create a my Social Security account<\/a><\/p>\n\n\n\n

          An explanation from Social Security as to how they calculate your retirement benefit:
          From SS: How Your Retirement Benefit is Calculated<\/a>
          From SS: Retirement Benefit Calculation Example<\/a><\/p>\n\n\n\n

          For a reference as to what benefits are typical, listed\nbelow are the estimated averages for 2019 Social Security benefits as indicated\nby the Social Security Administration.<\/p>\n\n\n\n

          Estimated Average 2019 monthly\nSocial Security benefits <\/p>\n\n\n\n