Entering your senior years and quitting the workforce is a significant life transition. It doesn’t matter if you want to make the jump now or decades from now having the necessary funds is essential. For this reason, you should be aware of the potential monthly amount of your Social Security income. This might assist you in estimating how much more savings you’ll require to maintain a reasonable standard of living.
Social Security Benefits
The primary determinants of your monthly Social Security benefit are the total earnings along with the age at which you choose to retire. Annual adjustments are made to benefits to account for increases in the cost of living, as determined by the Consumer Price Index. As per the Social Security Administration, the mean amount of a Social Security check in November 2023 was $1,710.78. But this figure doesn’t particularly account for retirees who made a middling wage while working.
Social Security Payment Of A Middle-Class Retire
According to the U.S. Census Bureau, the median household income in the country as of 2022 was $74,580. A middle-class retiree’s monthly Social Security payment would be $1,867 if they were to make this wage and retire at age 65, or 65 and 11 months. Remarkably, this amount only exceeds the average pension for all retirees by $156.22. On the other hand, their compensation would rise to $1,985 per month if they delayed retiring till age 66 an additional six months. If they waited much longer, to the age of 70, they would be eligible for a $2,696 monthly payment.
Social Security Benefits Assessment
These are, of course, only estimations. Using the benefit calculator provided by the Social Security Administration, you can obtain a more accurate estimate of your potential monthly payment amount. This is probably not the greatest idea if you intend to live off of your Social Security income exclusively. According to the SSA, retirees need 70 percent to 80 percent of their pre-retirement earnings to maintain their quality of life, and this payment only substitutes around 40% of that.
The Federal Reserve reports that 87% of those 60 and older had at least some savings for retirement. Only 52% of respondents, nevertheless, think their retirement savings plan is on track. 92% of retirees who are 65 years of age or older mention Social Security as a source of earnings. About half earn from interest, dividends, or rental income; one-quarter rely on wages, salaries, or self-employment; two-thirds obtain pensions; and seven percent receive cash transfers outside of Social Security.