9/9/2011 4:47 PM ET|
How much Social Security for you?
You won't find an estimate in your mailbox this year, but there are still ways to figure out what size your check will be when you decide to start benefits.
To save money, the Social Security Administration stopped mailing annual Social Security statements to workers this year. These four-page mailings gave workers a personalized estimate of their expected Social Security payments based on their actual earnings history. Now workers will have to go online to get this estimate, and only some of the information provided in the statements is available online. Here's a look at how to predict how much you will get from Social Security in retirement.
Consider the averages. In June 2011, the average Social Security benefit was $1,180.80 per month. The maximum possible monthly benefit for a worker retiring at age 66 in 2011 is $2,366. But to get this amount, the worker would need to earn the maximum taxable amount, currently $106,800, each year after age 21.
Familiarize yourself with the formula. Social Security benefits are calculated based on your 35 highest-earning years in the workforce and are adjusted for inflation. If you don't have 35 years of earnings, zeros are averaged in for the years you didn't work at a job in which you paid into Social Security.
The proportion of your income that is replaced by Social Security varies based on how much you earn. Consider a worker who turns 62 in 2011. To calculate his benefit, the first $749 of his average monthly earnings is multiplied by 90%, the next $3,768 by 32%, and the remainder by 15%. The sum of these three amounts equals his initial monthly payment amount. Workers also have cost-of-living increases added to their benefit beginning at age 62, even if they don't begin to receive benefits until a later year.
Try different retirement dates. The date you first sign up for benefits also has a large impact on how much you will receive.
"The biggest effect you can have on your benefit is when you claim," says Steve Sass, a research associate at the Center for Retirement Research at Boston College.
You won't get the full amount you are entitled to unless you wait until your full retirement age, which for most workers is 66 or 67. Your payout will be reduced if you claim early and increase if you postpone collecting your payments. For example, a worker entitled to $1,000 per month at age 66 would get 25% less, or $750 per month, if he signed up at age 62. However, if he waited until age 70 to collect, he would get $1,320 per month, 32% more. There is no additional benefit for delaying claiming beyond age 70.
Married couples have additional options. Married couples are entitled to benefits based on their own work record or up to 50% of the higher earner's benefit, whichever is more. A spouse may also be eligible for a survivor's benefit when the higher-earning spouse passes away.
"There are a lot more options for spousal benefits when you wait, at a minimum, until full retirement age," says Jean Setzfand, vice president of financial security at AARP. "People are eligible at 62, but there is a hidden bonus when you wait until full retirement age because it opens up a range of options that aren't available to you before that point in time."
For example, dual-earner couples who have reached their full retirement age may be able to claim spousal benefits and then later switch to payments based on their own work record, which will then be higher due to delayed claiming. Spousal benefits are reduced if claimed before full retirement age. You can also claim on an ex-spouse's work record if the marriage lasted at least 10 years.
Subtract likely Medicare premiums. Many retirees have their Medicare Part B premiums for doctors' services and outpatient care deducted from their Social Security checks. The premium for most new Medicare beneficiaries in 2011 was $115.40 per month. Medicare Part B premiums are prohibited by law from rising faster than Social Security cost-of-living increases for existing Social Security recipients.
This article was reported by Emily Brandon for U.S. News & World Report.
VIDEO ON MSN MONEY
Now let's talk about social security. The 'payroll tax cut' that obama and company pushed through. The one that (Thank God) is about to expire. It wasn't a 'tax cut'. It was a cut in how much you paid in to SS. Normal is you pay 6-1/2 % and your employer matches it. So 13% of your pay goes into SS for you. Obama and Co. cut what you paid to just 4-1/2 %. Sounds great right? You get an extra 2% of your income to spend. Now do the math. SS is going broke. So in typical democrat fashion, they slash the amount of money workers pay in by 30%! DUH! Think maybe SS will now go broke a lot faster? And since you are paying 30% less in..........how much less will you get out? They wont answer that. And the media is screaming the republicans want to 'raise taxes on the poor' because they are trying to stop this insanity and restore SS.
msnbc will delete this post. They always delete it when someone tries to get a little truth out there. But you can LOOK IT UP! Go to the governments own (.gov) website and read what the 'payroll tax cut' really is. Yep, demi's are totally screwing the poor again while telling them what a wonderful thing it is. People, go look for yourselves.
Show me one person that has said what you claim others have said?
How do you tell a stupid person they're stupid? I guess you could start with seeing who spreads the most lies, example might be telling Americans they will no longer get any money from SS
I'm a moderate republican ... NOT A TEAPUBLICAN. I have never voted for a dem in anything and I've been voting for decades.
When I look at what the republican party has turned into I'm almost ashamed to call myself a republican. These days, the rep party has moved so far to the right ... kissing the butts of the tea-baggers and religious right ... that I'm now considered a liberal.
I'm not sure how that has happened but I can tell you this: If the rep's can't or won't escape from the far right extremists that are intent on turning this country into a corporate controlled state, I will for the first time not vote for a single one of them ... not even for dog catcher.
Simply put, while I have worked hard all of my life and manage to keep a roof over my head and food on the table, I don't make a large amount of money. My 401k has shrunk and my retirement has been frozen. I will need SS and medicare when I retire in order to make it. I've paid into it for a long long time. I will not vote for those that will cheat me out of it.
While Obama is not my choice for President, I will not cut my own throat by voting a republican into office who wants to take all of that away. That would be beyond stupid.
When I look at my check, I see three taxes: One for medicare, one for SS and one for Fed. SS will be around for a long time if the feds will simply stop raiding it As far as I'm concerned, if the feds want to raid some money, take it from the payouts they give to the rich. Leave us poor people alone. We have enough problems as it is.
S.S. was designed to ( HELP ) people make end$ meet when they become to old to work. If it's a Ponzi design, the the FED's need to put back ALL the money it pulled out of S.S. funds and spent it on people and things that never paid into it. I find it hard get my mind around the double standard of OK for the government to take (steal ) S.S. funds and not replace it, and if a private worker like myself were to take funds and not replace it, I would go to prison.
Gov. Perry needs to spend his time returning the moneys to the S.S. fund. If he did that, HECK !!! maybe I would move to TX and vote for him. HA Ha ha when pigs fly coach class.
Vote R. Perry for dog catcher,,,
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Think saving money, paying bills, comparing prices and shopping for deals take way too much work? All of these can be done with very little effort on your part.