The average retired worker gets about $1,555 from Social Security per month, or about $18,660 per year. That's an interesting stat, but it doesn't tell you anything about how much you will get from the program. There are plenty of workers who can expect a lot more from Social Security. Here are three signs that you're one of them.
1. You've earned a lot of money
The government looks at your AIME — your average monthly income over your 35 highest-earning years, adjusted for inflation — when calculating your Social Security benefit. A large income during these years translates to larger checks when you sign up for Social Security, up to a point.
In 2021, only the first $142,800 you earn is subject to Social Security taxes. Since you're not paying taxes on anything over this amount, that money won't increase your checks any further.
You don't need to earn six figures every year to score an above-average benefit, though. Someone earning $50,000 per year, adjusted for inflation, every year for 35 years would end up with a full benefit of about $1,911 per month based on the current Social Security benefit formula.
If you want the largest checks possible, take steps now to increase your income. You could pursue promotions, work overtime at your existing job, consider switching employers, or start a side hustle.
2. You're delaying benefits past your full retirement age
You must wait until your full retirement age (FRA) — 66 to 67, depending on birth year — to claim the full Social Security benefit you're entitled to. Every month you receive benefits before this age reduces your checks slightly. Those who sign up right away at 62 will only get 70% of their full benefit per check if their FRA is 67, or 75% if their FRA is 66.
Conversely, every month you delay benefits past your FRA increases your benefit slightly until you qualify for your maximum benefit at 70. This is 124% of your full benefit per check if your FRA is 67, or 132% if your FRA is 66.
So even if your full benefit falls below the national average — say you only get $1,400 at your FRA of 67 — you could still get $1,736 per month by delaying Social Security until 70.
But delaying benefits isn't always possible. Those who are forced to retire unexpectedly or who have little savings of their own may need to start Social Security right away to cover their living expenses. And those who don't believe they'll live past their 70s are probably better off signing up for benefits earlier. They'll likely get more out of the program overall by doing this whereas, if they waited until 70, they may only claim benefits for a few years before they die.
3. Your my Social Security account tells you you're eligible for a large check
The surest way to know that you're expecting a larger-than-average Social Security check is to look at your my Social Security account. You'll be able to view an estimate of your average monthly benefit based on your current work history.
You can also view your earnings record, which shows how much money you've paid in Social Security taxes for each year you've worked. It's a good idea to look at this at least once per year to make sure all the information there matches up with your own records. If not, the government could inadvertently pay you less than you deserve.
If you find an error, fill out a Request for Correction of Earnings Record form and submit it to the Social Security Administration along with any tax documentation you have proving your actual income for the year.
Your my Social Security account also has a benefit calculator you can use to see how shifts in your income and various starting ages will affect the amount you get from the program. If you're married, you can also look at how much of a spousal Social Security benefit you may qualify for. Coordinating with your spouse to choose ideal starting ages for both of you can help maximize your household benefits.
It's difficult to predict how much you might get from Social Security when you're still a long way from signing up, but if one or more of the signs above applies to you, that's a good indication that you can expect sizable Social Security checks.
However, that doesn't mean you can skip your personal savings. You still need a large nest egg to help you cover what Social Security won't, especially since the future of Social Security is a bit unpredictable right now.
Once you know roughly what you can expect from Social Security and how much you need to retire, you can begin crafting a savings plan that will help you secure a comfortable future.
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