MooneyOnMoney.com

Retirement Read Time: 2 min

Social Security Benefits: How Much Will I Receive

Next to “When should I claim Social Security benefits?”, one of the more common questions people have is “How much will I receive?”

Calculating your potential Social Security benefit is a three-step process:

1. Calculate Your Average Indexed Monthly Earnings (AIME): The highest 35 years of indexed earnings is added together. It is then divided by the number of months in 35 years to arrive at your AIME. (“Indexed earnings” is an adjustment made to historical earnings so that they reflect a current standard of living.)

2. Determine Your Primary Insurance Amount (PIA): AIME is subjected to a formula based on the year of first eligibility (age 62).

3. Application Age: The final calculation will be based on the age you apply for Social Security retirement benefits. For instance, if you apply at full retirement age, you will receive 100% of your PIA. If you apply for early benefits, your benefit will be less, and if you wait until after full retirement age, your retirement benefit will exceed your PIA.

If this all sounds complicated, that’s because it is. However, the Social Security Administration allows you to calculate your personal benefits without you having to do any of the math.

Social Security is a complex retirement decision that requires careful preparation in order to maximize its value to you and your spouse in retirement. You should consider working with your financial professional as well as accessing the information resources at the Social Security Administration, to help you make the decisions that are most appropriate to your needs.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

 

Related Content

The Business Cycle

The Business Cycle

How will you weather the ups and downs of the business cycle?

A Living Trust Primer

A Living Trust Primer

Living trusts are popular, but their appropriateness will depend upon your individual needs and objectives.

A Primer on Irrevocable Life Insurance Trusts

A Primer on Irrevocable Life Insurance Trusts

Irrevocable life insurance trusts can be important tools that may accomplish a number of estate objectives.

 

Have A Question About This Topic?







Thank you! Oops!

Understanding Marginal Income Tax Brackets

An inside look at how marginal income tax brackets work.

Insurance Needs Assessment: Married With Children

When you’re married and have children, insurance needs will be different.

An Overview of Renter’s Insurance

Don’t overlook the need for renter’s insurance if you rent your home.

View all articles

Historical Inflation

This calculator shows how inflation over the years has impacted purchasing power.

A Look at Systematic Withdrawals

This calculator may help you estimate how long funds may last given regular withdrawals.

Assess Your Life Insurance Needs

This calculator estimates how much life insurance you would need to meet your family's needs if you were to die prematurely.

View all calculators

5 Smart Investing Principles

Principles that can help create a portfolio designed to pursue investment goals.

Principles of Preserving Wealth

How federal estate taxes work, plus estate management documents and tactics.

5 Smart Investing Strategies

There are some smart strategies that may help you pursue your investment objectives

View all presentations

Questions to Consider When Buying a Vacation Home

Doing your research is key before buying a vacation home.

A Fruitful Retirement: Social Security Benefit

Taking your Social Security benefits at the right time may help maximize your benefit.

4 Elements of an Estate Strategy

Learn about the importance of having an estate strategy in this helpful and informative video.

View all videos