Average Monthly SS Income (55, pensions, supplement, spouse)
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Sorry if this has been posted, or if this is common knowledge, but I just got a little more curious and googled the average social security monthly benefit at full retirement age. For 2016:
.
The Social Security Administration knows that's at the top of many minds, and as a result, it reports that the average monthly Social Security payment to retired workers will be $1,341 in 2016.
I guess it helps put things in context. I have 3 more years to go to full retirement age, and am still working. Not sure how much longer I will work.
Don't you have a recent Earnings Statement that SSA would have mailed you over the last 10 years or so ? It will show your estimated FRA benefit, based on your highest 35 years of income.
If you don't, you can get a copy of yours on-line by signing up for a mySocialSecurity account at https://www.ssa.gov/myaccount/
Also, be careful using the acronym SSI. SSI is "Supplemental Security Income", a separate program from SS Retirement programs. Also not to be confused with SSDI, the disability program.
Sorry if this has been posted, or if this is common knowledge, but I just got a little more curious and googled the average social security monthly benefit at full retirement age. For 2016:
.
The Social Security Administration knows that's at the top of many minds, and as a result, it reports that the average monthly Social Security payment to retired workers will be $1,341 in 2016.
I guess it helps put things in context. I have 3 more years to go to full retirement age, and am still working. Not sure how much longer I will work.
From social security as well Aged Couple, Both Receiving Benefits $2,212
The decision that plays the biggest role in how much you get, though, is the age when you claim Social Security. More than half of retirees take Social Security benefits right at age 62, when they first become eligible. Only about 20% waited at least until full retirement age of 66, with only a small portion of those waiting beyond 66.
There is the problem; only 22% of men and 17% of women waited to full retirement age before collecting.
I am 68 years old now and I have not yet collected benefits because I'm going to wait another two years and collect at 70 when I will need the money most.
If I had collected at age 62, as nearly 50% of males and 55% of females have elected to do, I remember my benefit would have been (cry) $1,700. If my wife would have collected at 62 as well together we would be very close to that "Aged Couple, Both Receiving Benefits $2,212" that social security published.
But we are waiting; my wife started to collect in April when she turned 66 and her benefit alone is right at $1,175. We were lucky, real lucky, with her birthday because we were at the very tail end of when a higher earning spouse could file and suspend which is exactly what I did.
By delaying benefits by just four years my benefit (at age 70) is estimated is estimated to be $3,075 which will give us a combined social security benefit of $4,250 which in my mind is a lot of money when you consider it will be exempt from both federal and state income taxes.
As far as income tax on social security it depends how much outside income you have.
Did you know that up to 85% of your Social Security Benefits may be subject to income tax? If this is the case you may want to consider repositioning some of your other income to minimize how much of your Social Security Benefit may be taxed and thereby, maximize your retirement income sources.
Using the tool if all we had was social security of $51,000 the federal income tax is a big fat zero. This is exactly as if you had a $66,500 a year job and we will do just fine on social security alone.
That is equivalent to nearly a weekly take home payroll check of $981 and my feeling is if a couple can't live on that, in most areas of the country anyway, then they have a spending problem.
So we won't have any problems with retirement even if all we do have is social security.
But what if we had taken benefits at 62? Lots and lots of lifestyle between $27,600 and $51,000 and I would rather have the money after 70 when chances might be I might not be able to work anymore.
By waiting for most people that is an 8% guaranteed "tax free" increase every year and where else can you get that kind of guaranteed return?
There is the problem; only 22% of men and 17% of women waited to full retirement age before collecting.
I am 68 years old now and I have not yet collected benefits because I'm going to wait another two years and collect at 70 when I will need the money most.
If I had collected at age 62, as nearly 50% of males and 55% of females have elected to do, I remember my benefit would have been (cry) $1,700. If my wife would have collected at 62 as well together we would be very close to that "Aged Couple, Both Receiving Benefits $2,212" that social security published.
But we are waiting; my wife started to collect in April when she turned 66 and her benefit alone is right at $1,175. We were lucky, real lucky, with her birthday because we were at the very tail end of when a higher earning spouse could file and suspend which is exactly what I did.
By delaying benefits by just four years my benefit (at age 70) is estimated is estimated to be $3,075 which will give us a combined social security benefit of $4,250 which in my mind is a lot of money when you consider it will be exempt from both federal and state income taxes.
As far as income tax on social security it depends how much outside income you have.
Did you know that up to 85% of your Social Security Benefits may be subject to income tax? If this is the case you may want to consider repositioning some of your other income to minimize how much of your Social Security Benefit may be taxed and thereby, maximize your retirement income sources.
Using the tool if all we had was social security of $51,000 the federal income tax is a big fat zero. This is exactly as if you had a $66,500 a year job and we will do just fine on social security alone.
That is equivalent to nearly a weekly take home payroll check of $981 and my feeling is if a couple can't live on that, in most areas of the country anyway, then they have a spending problem.
So we won't have any problems with retirement even if all we do have is social security.
But what if we had taken benefits at 62? Lots and lots of lifestyle between $27,600 and $51,000 and I would rather have the money after 70 when chances might be I might not be able to work anymore.
By waiting for most people that is an 8% guaranteed "tax free" increase every year and where else can you get that kind of guaranteed return?
nicet4, This is an interesting comparison, but doesn't your example above depend on the assumption that someone in their 60s will continue to work at the same income level all the way until they reach age 70 in order to get that significantly higher social security amount? That seems to be the caveat I see when I look at my SS account information online. What happens if I elect to stop work at say 62 or 63 and live on savings and other income until age 70--won't my benefit be much lower than if I continued full-time work at the same salary? (Even with 35 years of work history)
as long as your 35 highest years are your highest years working longer does not make much difference . only if those years bump out lower inflation adjusted earning years
as long as your 35 highest years are your highest years working longer does not make much difference . only if those years bump out lower inflation adjusted earning years
Thank you, mathjak. In my case, there are early years of low income that must be affecting my SS calculation. My FRA PIA is projected at just under $2000, but if I chose to take benefits starting at 62, it falls to $1250--maybe reflecting those early low income years? The estimated FRA amount comes with the caveat about assuming I will make $XXX amount between now and FRA.
There is the problem; only 22% of men and 17% of women waited to full retirement age before collecting.
I am 68 years old now and I have not yet collected benefits because I'm going to wait another two years and collect at 70 when I will need the money most.
If I had collected at age 62, as nearly 50% of males and 55% of females have elected to do, I remember my benefit would have been (cry) $1,700. If my wife would have collected at 62 as well together we would be very close to that "Aged Couple, Both Receiving Benefits $2,212" that social security published.
But we are waiting; my wife started to collect in April when she turned 66 and her benefit alone is right at $1,175. We were lucky, real lucky, with her birthday because we were at the very tail end of when a higher earning spouse could file and suspend which is exactly what I did.
By delaying benefits by just four years my benefit (at age 70) is estimated is estimated to be $3,075 which will give us a combined social security benefit of $4,250 which in my mind is a lot of money when you consider it will be exempt from both federal and state income taxes.
Are you sure that waiting to collect your Social Security benefit, is better or worse? There are many factors to consider. Many people will not live till age 70. Some people who wait till age 70, would have collected zero because they died before they could start collecting. Future Social Security benefit could be reduced in the future while you're waiting to collect. They could start using 'means testing' in the future. If you're a high income earner, maybe your benefit will be less by waiting if the 'means testing' reduces your Social Security benefit. If you wait, you maybe saving that higher Social Security benefit, which will be paid out to a nursing home, and you might not ever be able to spend the money on something that improves your life while you are younger.
Most important is the break even time, which is not mentioned at all. If you wait to collect a higher Social Security benefit, you are not collecting any Social Security benefit for each additional month you wait before starting to collect Social Security. For example, if a person retired at 65 and collected Social Security right away, they would collect $933 using your example. If they waited 12 months, they would collect $1,000 in Social Security benefits. By waiting 12 month, they lost $933 X 12 = $11,196. However, by waiting they collect $67 more per month. It will take 167 months, or nearly 14 years collecting the higher payout to make up for the 12 months where Social Security was not collected.
You can also calculate break even time for a larger time spread. If you compared someone that retires at age 65 and collects Social Security right away to someone who retires at age 65, but waits till age 70 to collect their Social Security benefit. When you wait 60 months to collect the Social Security benefit, it will cost you $55,980, since you do not collect Social Security for 60 months ($933 X 60 = $55,980). However, you are paid $387 extra at when you start collecting at age 70. It takes nearly 145 months to break even. You'll be better off by waiting when you are 82 years old, if and only if you are still alive at 82 years old. Even if you are alive at 82 years old, your better years will likely be behind you, and your health may have already declined.
Another factor to consider is if you collect Social Security sooner, and you don't need the Social Security benefit to live, but it is just extra money that goes into savings, you can carefully invest the money, and make more money with your Social Security benefit.
I'm not sure why you're saying that Social Security isn't taxed. Maybe you're retirement income is low enough so your Social Security benefits aren't taxed. As I understand it, 85% of the Social Security benefit would be taxed federally and by most states when the Social Security benefit are combined with other income from pensions and retirement account withdraws.
So, the moral of the story is, it makes sense for people to take a reduced Social Security benefit sooner, rather than waiting. Although you could wait, for the possible, but not guaranteed payout, since you might not live to see the larger payout. You are betting that you will be alive past age 82 and will also be healthy enough, which might be a bet that you could lose!
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