The social security benefit is one of the most important incomes for retired and disabled people as well as those who survive the deceased workers. Millions of Americans are dependent on these benefits so it is crucial to know how much a person can expect per month. The Social Security Administration has revealed that this year, around 68 million Americans will be receiving the benefits each month out of which, about 75% belong to the retired category. As of June, the retired workers have received an average monthly check of $1918. This amount, however, does not remain the same as it depends upon how long a person has worked, how much a person earned during his career, and when a person started collecting the benefit. So, in this article, we will tell you how you can figure out your monthly social security benefits.
How To Calculate The Social Security Benefits?
The Social Security benefits can be estimated by taking a person’s current salary and planned retirement age. All you have to do is, take a person’s date of birth, current annual salary, and planned retirement age and calculate the social security amount by entering all these in the online calculator. However, the administration has estimated that most people claim social security benefits before reaching their full retirement age, which directly reduces their monthly paycheck amount.
Now, if an individual starts collecting the social security retirement benefits at the earliest age of 62 years, then they would see a permanent decrease in the monthly benefit amount by approximately 30%, in case their full retirement age is 67 years. This means that if a person is receiving $1000, then it would be cut down to $700. However, those who delay their social security benefits can see an increase of 8% each year, until they reach the age of 70. Some officials have suggested that it is best to wait if you want to receive an increased amount.
The maximum Social Security retirement benefit in the year 2024 is as follows:-
- People who retire at the earliest retirement age of 62, receive $2710 per month
- Individuals who retired at the full retirement age of 67, receive $3822 per month
- Those Americans who retired at the age of 70, receive $4873 per month
How Are Social Security Benefits Funded?
In America, the social security benefits are mainly funded by the payroll tax which is paid by employers and employees each, at the rate of 6.2% of wages. Further, 4% of this government program’s funds come from taxing the social security benefits. All these revenues are directly sent to two federal trust funds which are then used to pay the present as well as the future social security benefits.
Is There Any Problem That Surrounds The Funding Of These Benefits?
Yes, there is a big problem that surrounds the funding of social security benefits. As the population is increasing, these funds are getting decreased. Officials say that in roughly a decade, many Americans will see a decrease in their social security benefits if the government does not do anything to protect the program. In 1983, a major overhaul was done in the Social Security program when the government increased the eligibility age from 65 to 67. At the time of this change, the insolvency of the social security program was just 3-4 months away, but the action taken by the government acted as a shield.
It is reported that the social security benefits, in America specifically, represent about 30% of the people’s income who are above the age of 65 years. Also, the number of people in this age group is estimated to rise from 58 million in 2022 to 82 million in 2050. According to the experts, this is a massive increase and this shows that more people will become dependent on the social security benefits with each coming year.
