cardiff-stage.fmg.ninja

320-420-9923

Retirement Read Time: 2 min

Social Security Benefits: How Much Will I Receive

Next to “When should I claim Social Security benefits?”, one of the more common questions people have is “How much will I receive?”

Calculating your potential Social Security benefit is a three-step process:

1. Calculate Your Average Indexed Monthly Earnings (AIME): The highest 35 years of indexed earnings is added together. It is then divided by the number of months in 35 years to arrive at your AIME. (“Indexed earnings” is an adjustment made to historical earnings so that they reflect a current standard of living.)

2. Determine Your Primary Insurance Amount (PIA): AIME is subjected to a formula based on the year of first eligibility (age 62).

3. Application Age: The final calculation will be based on the age you apply for Social Security retirement benefits. For instance, if you apply at full retirement age, you will receive 100% of your PIA. If you apply for early benefits, your benefit will be less, and if you wait until after full retirement age, your retirement benefit will exceed your PIA.

If this all sounds complicated, that’s because it is. However, the Social Security Administration allows you to calculate your personal benefits without you having to do any of the math.

Social Security is a complex retirement decision that requires careful preparation in order to maximize its value to you and your spouse in retirement. You should consider working with your financial professional as well as accessing the information resources at the Social Security Administration, to help you make the decisions that are most appropriate to your needs.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

 

Related Content

My Retirement Savings

My Retirement Savings

Estimate how long your retirement savings may last using various monthly cash flow rates.

Value vs. Growth Investing

Value vs. Growth Investing

Among stock-market investors there’s long been a debate between those who favor value and those who favor growth.

A Bucket Plan to Go with Your Bucket List

A Bucket Plan to Go with Your Bucket List

Longer, healthier living can put greater stress on retirement assets; the bucket approach may be one answer.

 

Have A Question About This Topic?







Thank you! Oops!

Understanding Equity Compensation

Net Unrealized Appreciation and how it affects tax responsibilities.

Buying a Home

A look at what you need to think about when buying a home.

The Five Basics of Financial Literacy

How literate are you when it comes to your finances? Brush up with these five basics.

View all articles

Long-Term-Care Needs

Determine your potential long-term care needs and how long your current assets might last.

Taxable vs. Tax-Deferred Savings

Use this calculator to compare the future value of investments with different tax consequences.

Impact of Taxes and Inflation

Estimate the potential impact taxes and inflation can have on the purchasing power of an investment.

View all calculators

How Cash Apps Work

Peer-to-peer payment apps are one of the newest ways to send money.

Working With A Financial Professional

A financial professional is an invaluable resource to help you untangle the complexities of whatever life throws at you.

Bursting the Bubble

Tulips were the first, but they won’t be the last. What forms a “bubble” and what causes them to burst?

View all videos