Every month, millions of retirees in the United States wait for an essential income: the Social Security check. This benefit, managed by the Social Security Administration (SSA), is more than just a simple aid. For many, it's their main source of income.
Starting this year, something historic is happening: the average monthly amount for retirees exceeds $2,000. But how is this amount calculated? How can you make sure you receive as much as possible? Here we explain it to you step by step.
What is Social Security and who does it benefit?
The Social Security program was created in 1935 and today helps more than 70 million people. Among them are retirees, people with disabilities, and survivors of deceased workers.
Although many people believe this program will cover all their previous income, the reality is different. On average, it only covers about 40% of your prior income. That's why understanding how it works is essential.
Key factors that determine your monthly payment
Your monthly SSA check isn't the same as everyone else's. There are three main factors that directly influence the amount you'll receive:
1. Your work history
The more years you've worked, the better. SSA calculates your benefits based on your 35 highest-earning years. If you worked less than that, they might include years with low or even zero income, which reduces your check.
2. Your earnings during your working life
It's not just about how much you've worked, but how much you earned. If your earnings were higher in recent years, these could replace earlier years with lower income, increasing your benefit.
3. The age when you decide to retire
You can start collecting from age 62, but if you wait, you'll receive more.
For each year you delay after your full retirement age (66-67), your check can increase by up to 8% more.
How to maximize your monthly check?
Here are some practical tips:
- Work at least 35 years. Make sure you have enough years with solid earnings.
- Wait to collect. If you can, don't take your benefits at 62. Waiting until 70 can make a big difference.
- Check the SSA calculator. You can estimate how much you'll receive based on your age and your earnings.
- Increase your earnings if possible. More earnings, especially in your last working years, can boost your benefit.
- Save on your own. A retirement savings plan, even a modest one, will give you greater security.
What about the program's future?
Some experts warn that the Social Security Trust Fund could run out by 2035. This doesn't mean it will stop paying, but it could cover only 75% of current benefits. That's why it's crucial to stay informed and adapt to possible changes in the system.