February 6, 2004
Despite the light aroma of gangrene that seems to surround Social Security, you'll probably get something in return for all the taxes you've paid into the program. How much? That depends on many factors.
The good news is that you can get an estimate right now from the Social Security Administration (SSA) itself. There are two main ways to get a projection of your benefits: via a statement sent to you by the SSA or by using an online calculator.
If you are a working American who is at least 25 years old, then you will receive an official Social Security statement three months before your birthday. (You may disagree with a lot of what the SSA does, but do you send something to all of your friends and relatives three months before their birthdays?) Your statement will contain all kinds of useful information, including an estimate of how much you might receive if you retire at different ages, how much you might receive if you become disabled, and how much your spouse and kids might receive if you join that great tax shelter in the sky.
It's important to recognize that Social Security will not replace your entire income in the event of your retirement, disability, or death. The Social Security retirement benefit currently replaces approximately 40% of the average salary. The average survivor benefit for a widow with two kids is approximately $22,000 a year. So make sure you have enough retirement savings, disability insurance, and life insurance beyond what Social Security will provide.
If you'd like to see your most current projections but don't want to wait until your next statement is sent to you (you probably tear small holes in the presents under the Christmas tree, too), call 1-800-772-1213.
The statements sent to you by the SSA will contain the most accurate projections of your benefits since they are based on your actual earnings history according to IRS records. However, if you'd like an estimate right now, visit the SSA's online calculators. Keep in mind, though, that all projections are not the actual amount you'll receive, since laws and your income will change. But the numbers are good enough to use for your retirement and insurance planning, as well as to satisfy your curiosity.