As of July, the average monthly check for a retired worker was $1,919, or about $23,028 per year. In other words, some Americans may be able to meet their basic retirement needs with Social Security benefits alone but for many households, it won't be enough.
So, if you've only worked 20 years, which is 10 more than the minimum required to collect Social Security, the Social Security Administration will add your salaries from those 20 years and then divide by 35.
But even if you never worked and therefore don't have an earnings record, you're not necessarily out of luck. If you're married (or were married) to someone who's entitled to Social Security, you can collect spousal benefits equal to 50% of your husband or wife's benefits at full retirement age.
Roughly one in seven Social Security recipients ages 65 and older depend on their benefits for nearly all their income, according to an AARP analysis. Unable to maintain the lifestyle of their working years, they trim their already trim budgets, move into smaller homes, or rely on the kindness of relatives to get by.
If your spouse dies, do you get both Social Security benefits? You cannot claim your deceased spouse's benefits in addition to your own retirement benefits. Social Security only will pay one—survivor or retirement. If you qualify for both survivor and retirement benefits, you will receive whichever amount is higher.
The bureau says the median household income in the U.S. that year was $74,580. A 55-year-old earning that amount today and planning to take Social Security at age 62 would get an estimated monthly benefit of about $1,869 a month — or $22,428 a year. (This figure was reached using the AARP's Social Security calculator.)
The $1,000 per month rule is designed to help you estimate the amount of savings required to generate a steady monthly income during retirement. According to this rule, for every $240,000 you save, you can withdraw $1,000 per month if you stick to a 5% annual withdrawal rate.
Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
Has your income declined or have you experienced a loss of financial resources? You may be able to get additional income through the Supplemental Security Income program, which helps seniors and the disabled who have limited income and financial resources.
Insufficient Income
On average, Social Security benefits replace about 40% of pre-retirement income, which is often not enough to cover basic living expenses, let alone healthcare costs, leisure activities or unexpected emergencies.
Generally, if Social Security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return.
You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits only when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.
Each survivor benefit can be up to 100% of your benefit. The amount may be reduced if the women start benefits before their own full retirement age, but they don't have to share — the amount isn't reduced because you've had more than one spouse.
Ninety-five percent of never-beneficiaries are individuals whose earnings histories are insufficient to qualify for benefits. Late-arriving immigrants and infrequent workers comprise the vast majority of these insufficient earners.
Key contrasts include Social Security, where 58% currently rely on it but only 35% expect to, and retirement accounts like 401(k)s or IRAs, expected to be a major source by 50% of nonretirees but a major source for only 29% of retirees.
The minimum benefit starts at $49.40 per month in 2023 and $50.90 in 2024, requiring at least 11 years of work history. The maximum benefit, for those with 30 years of work, increased from $1,033.50 in 2023 to $1,066.50 in 2024.
If you retire with no money, you'll have to consider ways to create income to pay for your living expenses. That might include applying for Social Security retirement benefits, getting a reverse mortgage if you own a home, or starting a side hustle or part-time job to generate a steady paycheck.
Just because you don't bring home a paycheck doesn't mean you're not working. A stay-at-home parent can get a Social Security check just like any other worker.
Social Security is an earned benefit. To collect a monthly retirement benefit, a worker must pay into the system for at least 10 years (they need not be consecutive years). Tough rules in place assure that only workers who have met the 10-year qualification can collect retirement benefits.