One of the first steps in planning for retirement is to get an accurate read on just how much income you can expect to receive from Social Security. The exact amount of your Social Security benefit will depend upon your earnings history and retirement timing. Although Social Security provides only about a third of a typical retiree’s income, it often serves as the foundation for calculating how much other income you’ll need and how much you’ll need to save.
The best and most accurate estimate of your future Social Security benefits comes from the Social Security Administration (SSA). If you are age 60 or older, you should be automatically sent an annual statement showing exactly how much you can expect when you retire. If you are under age 60, you can access current estimates through the SSA’s My Social Security site. You can also access SSA’s online calculators.
Here is a summary of the different ways you can get accurate estimates of your Social Security:
Social Security Statements
These are mailed annually to anyone age 60 or older who has paid into Social Security. The statements include an estimate of your monthly benefit at full retirement age, based on your earnings history. They also show your earnings history – a year-by-year breakdown of earnings on which benefits are based. You can also request a statement by creating a personal my Social Security account. Once it’s set up, you can easily access updates and view your earnings history. You can also request a statement at any time by calling 1-800-772-1213 or contacting your local SSA office.
This gives estimates based on your actual Social Security earnings record. The calculator shows results for early (age 62), full (ages 65-67 depending upon your year of birth), and delayed (age 70) retirement. The Retirement Estimator also lets you create additional "what if" retirement scenarios based on current law.
This will help you estimate your Social Security benefits if you do not have an earnings record with Social Security or cannot access it. The calculators will show your retirement benefits as well as disability and survivor benefit amounts if you should become disabled or die. A variety of calculators are available that address different circumstances.
A recent report by the SSA suggests that a lot of Americans are not taking advantage of the free statements available to anyone who has paid into Social Security. According to the report, only 43% of registered my Social Security users accessed their accounts online in 2018, down from 96% in 2012.1
How much also depends on when you start collecting
If you want, you can sign up for Social Security benefits at age 62. However, you'll receive less than your full benefit -- somewhere between 70% and 75% -- depending on when you were born. What’s more, if you are still working and make more than the yearly earnings limit ($17,640 in 2019), your benefit will be reduced by one dollar for every two dollars earned beyond that limit.
Wait until full retirement age (from 66 to 67 for those born after 1942) and you'll receive your full benefit and face no earnings penalty. Sign up for benefits beyond full retirement age and your benefit will increase 8% a year until you reach age 70.
When you decide to collect will depend in part on how much you can expect to receive. So make a point of checking out one of the resources above.
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1Source: Social Security Administration OIG, Issuance of Social Security Statements, February, 2019.
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