Will You Earn More Than the Average Social Security Benefit?

We regularly remind our readers that Social Security was intended to serve as a supplement to retirement income, and that you shouldn’t expect to rely on your checks to cover your entire budget in retirement. But that doesn’t mean you shouldn’t try to maximize those benefits as much as possible! Social Security can definitely serve as one important part of your overall financial plan.?

In fact, 37 percent of men and 42 percent of women depend upon Social Security for at least half of their retirement income. So you might be wondering what the average Social Security benefit is, and whether you can expect to receive that much or maybe more.?

Social Security does regularly increase checks a bit, in response to inflation, but the average expected benefit for 2022 will be $1,657 per month. But will your benefit fall in the average range, or perhaps be more generous? There are three ways to influence your final benefit amount, and you can begin to evaluate those factors now.?

Have you worked at least 35 years or longer? The benefits calculator uses your 35 highest-earning years to determine your final benefit amount. Those who worked more than 35 years might have some higher-earning years to average into the formula. On the other hand, those who worked fewer than 35 years will have some zeros averaged into their work history. The results can determine whether you receive an average-sized check, or one that is significantly smaller or larger than average.?

You earn an above-average salary. The median US salary is just over $52,000 per year, and earnings are taxed for Social Security purposes up to a limit of $147,000 annually. So if you’re earning in the upper end of that range, and continue to be a high earner for many years, you will probably end up with a benefits check that is larger than average.?

You’re going to delay your claim. Your benefit amount will be determined by when you file your claim. Full retirement age is 66 or 67, depending upon when you were born. But if you delay your claim for a few more years, your benefit will grow larger (up until age 70, at which point there is no benefit to waiting).?

If you’re really curious about your potential Social Security benefit, call us to schedule an appointment. We can help you estimate your potential future benefit amount, and help you plan for other forms of income to go along with it.?