When you are engaged in your retirement planning efforts, you probably recognize the fact that Social Security will be a big piece to the puzzle. You should certainly understand what you can expect from this program when you are looking ahead toward your senior years.
During your working career, you see an annoying deduction from your direct deposit in the form of the FICA tax. This deduction is not entirely negative, because you are paying into Social Security and Medicare when you pay it.
Each year you accumulate retirement credits as you are paying this tax. In 2015, you get one credit for every $1220 that you earn. It is possible to earn a maximum of four credits in a calendar year. Once you have 40 retirement credits in the bank as it were, you will qualify for Social Security when you reach the age of eligibility.
The eligibility age depends upon the year of your birth. Suffice to say that if you are not currently receiving Social Security, your age of eligibility will be somewhere between 66 and 67.
The exact amount of your benefit is calculated through the utilization of the 35 years during which you earned the most amount of money.
You can wait until you reach the full eligibility age to receive your full benefit, but you could alternately choose to accept a reduced benefit when you are as young as 62 years of age. It is also possible to delay the submission of your application for your Social Security benefit until you are as old as 70. If you go this route, your benefit would rise by eight percent for each year that you delayed.
At the present time, the maximum monthly Social Security benefit is $2663 per month. The average Social Security benefit for all retired workers in 2015 is around $1328 per month, and the average for a couple (when both parties are receiving benefits) is $2176 per month.
The Social Security Administration used to mail out annual statements that would let you know what you could expect when you start to receive your benefit. This practice was discontinued a few years ago, but you can visit this page on the SSA website to get an estimate of your benefit: Retirement Benefit Estimator.
As you can see from these figures, Social Security will certainly help, but in and of itself, an average benefit is probably not going to be enough to provide you with a truly comfortable retirement. This is why careful retirement planning is key if you want to enjoy your golden years to the fullest.
Our firm can help if you have concerns. We would be glad to become apprised of your situation and help you plan ahead for the future.
To set up a free consultation, visit this page and send us a message: Hartford CT Retirement Planning Attorneys.