As the Bidens move into the White House, the president-elect will soon earn the $400,000 salary paid to the country's chief executive. But this won't be his only income source. Like many past presidents, he'll also receive Social Security retirement benefits.
In fact, according to their 2019 tax returns, Joe and Jill Biden collectively received a grand total of $52,595 in Social Security income. These benefits are well above what most retirees get. But with the couple earning close to $1 million that same year (and with their earnings topping $1 million on several recent tax returns), it may seem surprising that their benefits aren't higher.
There are two reasons, however, that their Social Security checks are below what you might expect.
1. There's a limit to what retirees get, no matter what they earned
Social Security is meant to help ensure financial security for seniors, but isn't designed to pay tens of thousands of dollars in monthly benefits. As a result, there's a cap on the amount of money any retiree can receive.
The maximum benefit is determined by something called the wage base limit. Benefits are calculated based on average inflation-adjusted wages over the 35 highest-earning years of your career. But if you earn a lot of money, not all your wages count. You're taxed only on earnings up to the wage base limit, and your benefits are figured based on that limit, rather than on the total amount you actually earned.
For example, in 2021, the Social Security wage base limit is $142,800. Those who make more won't pay Social Security taxes on any extra income above that limit. And they also won't get credit for any extra income when benefits are determined.
Even though the Bidens regularly earned more than the wage base limit, their monthly benefit isn't based on the full amount of their earnings. As a result, their checks are smaller than they would've been had all their income counted in calculating them.
2. The Bidens gave up the chance to maximize benefits
There's another reason the first couple's benefits are lower than you might expect. They didn't take steps to get the largest possible monthly check. Joe Biden's tax returns show he claimed Social Security some time during 2008. During that year, he turned 66, which was his full retirement age (FRA).
He delayed the start of his checks until FRA, so he didn't end up reducing his standard benefit with early filing penalties. But by not postponing the start of his benefits until 70, he also didn't take advantage of delayed retirement credits. Had he done so, he could've boosted his checks for every month he waited. His total benefit increase could've been as much as 8% for each year he delayed up to age 70.
Dr. Jill Biden was born in 1951, so her full retirement age is also 66. Since she earned plenty of her own income and wouldn't have been reliant on spousal benefits, it's unlikely Joe Biden claimed early to unlock access to them for her.
We don't know why they decided to claim before age 70. And the fact that their Social Security benefits are smaller than they could've been likely won't affect their financial security. But most people can learn an important lesson from seeing the amount of Social Security income available to the first couple.
For the Bidens, their benefits alone would replace a very small percentage of their pre-retirement earnings. And this is the case for any benefit recipient -- even people with earnings well below the wage base limit, since the program is not designed to be your sole source of support.
The first couple gets just over $50,000 in Social Security annually despite doing well financially throughout their working lives. So those whose earnings weren't as high are going to see far smaller checks, and must have supplementary savings to ensure a comfortable retirement.