Wondering how much your Social Security Check will be? Key factors explained
Curious about how much you’ll receive from Social Security? Learn the key factors that determine your payment and how it’s calculated.
Do you fully understand what it means to receive your Social Security check? Do not worry! Whether you have just entered the workforce or nearing retirement age; we know just how tricky and important this information is, that is why we are explaining how your Social Security check works.
While the full amount you receive depends on many different factors, we are explaining all of them in this article to help you realize just how much you'll receive from your Social Security checks.
What is Social Security?
Social Security is a U.S. federal program which provides retirement funds, benefits and disability income to qualified individuals. It is run by the Social Security Administration (SSA), and over 72 million Americans, benefit from it.
However, not only working individuals benefit from this Old-Age, Survivors, and Disability Insurance (OASDI) program, but also surviving spouses and children are eligible for benefits.
How your Social Security works?
As an insurance program, workers have to pay into the program a part of their checks. Typically, companies automatically withhold a part of their paychecks to fulfill the Social Security payment. However, self-employed workers pay Social Security taxes when they file their federal tax returns.
After having paid into the Social Security system for over 10 years, you become eligible for early retirement at age 62. While your full retirement age (FRA), can be between the ages of 66 and 67, depending on the year you were born; you can collect a higher monthly payment if you wait until you turn 70 to collect your benefits. Nonetheless, you don't receive any extra if you wait any longer than that.
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How much can I get in Social Security benefits?
On 2024, the average monthly retirement payment was of $1,869.77, but the amount of your retirement benefits depend on your average indexed monthly earnings (AIME) during your 35 highest-earning years, which is why the numbers are so different among retirees.
The annual amount increases by 8% each year you delay collecting your benefits, with a cap when you reach 70 years old. It is also worth mentioning that your benefits will vary depending on when you begin collecting it. In 2024, the maximum amount someone aged 62 could collect was $2,710 ($32,350 annually); but for someone who had reached 70 years the amount was of $4,873 ($58,476 annually).
If you want to know an approximation of the amount you will receive when you retire, depending on the age you plan to do it; the Social Security Administration has a calculator on their official website.
