So you're wondering how much income to expect from Social Security in retirement, when you're earning $100,000 annually now? That's a good question to ask, because we all should have at least a rough idea of how much to expect from Social Security, to help with our retirement planning.
Here, then, is an answer to that question, along with guidance for the many of us who earn significantly more — or less — than $100,000.
How much Social Security income to expect
It can be a little tricky to pin down exactly how much to expect from Social Security — especially if you're still relatively young with many working years ahead. The formula that the Social Security Administration (SSA) uses to determine your benefits is based on your earnings in the 35 years in which you earned the most (adjusted for inflation).
If you're, say, 40, with perhaps 25 more working years ahead of you, your benefits may end up being much higher or lower than today's estimate if you end up earning a lot more or less than expected.
Still, a best guess is useful. For the most precise estimate, visit the SSA.gov website and set up a “my Social Security” account, for free. Once you do so, you can access estimates of your future benefits that will be adjusted over time as more years of earnings data are factored in. You can also see the SSA's record of your earnings by year. If you spot any errors in it, it can be worth having them fixed, in order to eventually get all the income to which you're entitled.
Benefits for those earning $100,000
Now let's zero in on those with $100,000 incomes. Again, they will not all have the same earnings records, as some may have had above-average earnings throughout their lives, and some may have only recently gotten an outsized raise to a six-digit income. Some will be 35, with decades of work before they retire, and some will be 65, retiring today.
The table below, based on results from an online calculator from the Consumer Financial Protection Bureau website, offers an idea of what annual benefits someone whose earnings peaked at $100,000 can expect, depending on their current age and when they start collecting benefits:
Start Collecting Benefits at 62
Start Collecting Benefits at 67
Start Collecting Benefits at 70
Timing and Social Security
As you can see in the table above, how much you receive will depend, to a significant degree, on when you start collecting your benefits. Each of us has a “full retirement age” at which we can start collecting the full benefits to which we're entitled, and for most of us, that's 66 or 67. For those born in 1960 or later, it's 67. You can start collecting as early as age 62, though, or as late as age 70 — with your benefits shrinking or growing accordingly.
What can you expect from Social Security?
Remember that the SSA.gov website and your my Social Security account offer estimates based on your particular earnings history, so that's where you'll get the most accurate estimate.
Know, too, that you may be able to improve those numbers, especially if you still have plenty of time before you retire. There are more ways to increase your Social Security benefits beyond timing when you start collecting. For example, you might work longer than you originally planned, which offers multiple benefits.
It's worth learning more about Social Security, in order to get the most out of the program. It's important, too, because most of us will get a sizable portion of our retirement income from Social Security.
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