If you start collecting your benefits at age 65 you could receive approximately $33,773 per year or $2,814 per month. This is 44.7% of your final year's income of $75,629.
Still, your starting Social Security benefit is higher. That's how the government encourages people to postpone starting their benefits. Here's the starting benefit for each of those same final annual incomes, if you wait until age 70: Final pay of $80,000: benefit of $2,433 monthly, $29,196 yearly.
The 4% Rule: A Simple Formula for a Complex Calculation
According to this rule, you'd need a nest egg of $1.25 million for a $50,000 annual retirement income. To generate $75,000 per year in retirement, you would need retirement savings of $1.875 million using the 4% rule.
Suppose you were born on Jan. 1, 1960, and had an average annual income of $50,000. As of May 2023, you would get a monthly benefit of $1,386 if you filed for Social Security at 62; $1,980 at full retirement age (in this case, 67); or $2,455 at 70.
If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase. If you start receiving benefits early, your benefits are reduced a small percent for each month before your full retirement age.
Beginning with the month you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn.
We: Base Social Security benefits on your lifetime earnings. Adjust or “index” your actual earnings to account for changes in average wages since the year the earnings were received. Calculate your average indexed monthly earnings during the 35 years in which you earned the most.
Social Security benefits are calculated based on the individual's highest 35 years of inflation-adjusted earnings. The amount a person receives in Social Security benefits is not directly affected by their current income or wealth.
Based on the 75% to 80% rule, you'd need between $75,000 and $80,000 a year in retirement.
If you earned around $50,000 per year before retirement, the odds are good that a $300,000 retirement account and Social Security benefits will allow you to continue enjoying your same lifestyle. By age 55 the median American household has about $120,000 saved for retirement, and about $212,500 in net worth.
According to the Center for Retirement Research at Boston College, you'll need at least 80 percent of your current income in retirement. This is sometimes called “replacement income.” So if you earn $75,000 a year now, you'll need at least $60,000 a year to maintain your lifestyle.
If you earn $75,000 per year, you can expect to receive $2,358 per month -- or about $28,300 annually -- from Social Security.
While you may have heard at some point that Social Security is no longer taxable after 70 or some other age, this isn't the case. In reality, Social Security is taxed at any age if your income exceeds a certain level.
The maximum benefit depends on the age you retire. For example, if you retire at full retirement age in 2024, your maximum benefit would be $3,822. However, if you retire at age 62 in 2024, your maximum benefit would be $2,710. If you retire at age 70 in 2024, your maximum benefit would be $4,873.
If you are married and you and your spouse have worked and earned enough credits individually, you will each get your own Social Security benefit.
Yes, you can. Notify the Social Security Administration that you were married more than once and may qualify for benefits on more than one spouse's earnings record. They will be able to tell you which record provides the higher payment and set your benefit accordingly.
Although you need at least 10 years of work (40 credits) to qualify for Social Security retirement benefits, we base the amount of your benefit on your highest 35 years of earnings.
No waiting period is required if you were previously entitled to disability benefits or to a period of disability under § 404.320 any time within 5 years of the month you again became disabled.
You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, we will reduce your benefits. Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn.
High Earners
After their income hits a certain level, their Social Security withholding stops for the year. Officially known as the wage base limit, the threshold changes every year. As mentioned above, the 2023 limit for paying FICA taxes is $160,200, and the 2024 limit for paying FICA taxes is $168,600.
Beneficiaries are currently searching for information on How Do I Receive the $16728 Social Security Bonus? Retirees can't actually receive any kind of “bonus.” Your lifetime earnings are the basis for a calculation that the Social Security Administration (SSA) uses to calculate how much benefits you will receive.
As of December 2023, the average check is $1,767.03, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient.