Retire

How much you’ll get in retirement if you only receive Social Security – and how to boost payments… – The Sun

Summary

AMERICANS with no retirement savings and who plan to just claim Social Security in their golden years may be in for a nasty surprise.

That’s because Social Security isn’t typically meant to replace your entire income when you retire.

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We explain how much you’ll get in Social Security in retirement if you have no other incomeCredit: Getty

In fact, the rule of thumb is that Social Security benefits replace around 40% of pre-retirement income.

Nearly nine out of 10 peo…….

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AMERICANS with no retirement savings and who plan to just claim Social Security in their golden years may be in for a nasty surprise.

That’s because Social Security isn’t typically meant to replace your entire income when you retire.

1

We explain how much you’ll get in Social Security in retirement if you have no other incomeCredit: Getty

In fact, the rule of thumb is that Social Security benefits replace around 40% of pre-retirement income.

Nearly nine out of 10 people aged 65 and older were receiving a Social Security benefit as of December 31 last year.

Of these, 12% of men and 15% of women rely on Social Security for 90% or more of their income.

If you’re currently planning to follow a similar path, we explain how much you can expect to get and ways to boost the payments.

How much you’ll get in Social Security

If you’re planning to retire on just Social Security and you’re single, you may be forced to live on just $1,657 a month on average, or $19,884 a year.

That’s the average monthly benefit individual seniors are in line for come January of 2022, once the cost-of-living adjustment (COLA) of 5.9% comes into effect.

For a retired couple who are both receiving benefits, the average monthly check will increase from $2,599 to $2,753 in the new year.

Over a year, this amounts to a total household income of $33,306.

Meanwhile, a widowed mom of two children will receive $3,187 a month in 2022, working out as $38,244.

Of course, while it’s possible to get by on the amounts if you live frugally, you may want to boost your payments for a richer life in retirement.

How to boost Social Security payments

There are three main ways to boost your monthly Social Security payments – increase your earnings, work at least 35 years and delaying your claim.

We break down your options below.

1. Boost your earnings

The Social Security system isn’t universal – instead, your future benefits will depend on your earnings history, among other factors.

In other words, the more money you earn, the higher your benefit will be.

To get the maximum Social Security benefit, you’ll need to earn the maximum wage that’s subject to Social Security taxes.

The maximum wage cap is $142,800 in 2021, but it will increase to $147,000 in January next year.

In other words, as long as you earn $147,000 next year and others, you’ll set yourself up to get the maximum retirement benefit in future.

If your income isn’t high enough for the wage cap, keep in mind you can also count extra income made from side hustles towards it.

2. Work at least 35 years

Your career may last way longer than 35 years, but it’s only …….

Source: https://www.the-sun.com/money/4138804/how-much-retirement-social-security/