Social Security provides an important piece of nearly every senior's retirement plan. For some, it's the only source of retirement income they have. So it's no wonder that everyone's curious about how much they'll get from the program.
Most people claim Social Security in their 60s. With the average life expectancy being about the mid-80s for adults in their early 60s today, it's not unreasonable to expect that you could receive monthly checks from the program for around 20 years, and maybe even longer. Below, we'll look at what kind of a lifetime benefit that might entitle you to, and possible changes to the program that could affect that.
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How much will you get from Social Security over 20 years?
To calculate roughly how much any individual would get from Social Security over 20 years is pretty straightforward. All you need to do is take their monthly check amount and multiply it by 12 to get their estimated annual benefit. Then, multiply this by 20 years.
For example, the average monthly Social Security benefit was $1,841 as of September. That translates to an annual benefit of $22,092. Over 20 years, that would amount to $441,840 in benefits.
You can do something similar to estimate your lifetime Social Security benefit, even if you haven't begun taking benefits yet. Start by creating a my Social Security account, if you haven't already. That site has a calculator to estimate your future Social Security benefits at any starting age, based on your work history to date. The younger you are when you begin taking those benefits, the smaller your monthly checks will be. Delaying the point at which you start taking benefits gives you bigger monthly payments, but of course, you'll get fewer of them.
Choose a claiming age, and you can follow the steps above to estimate your lifetime benefit. But instead of using that arbitrary 20-year figure, run the numbers based on how long you expect to claim benefits for. For example, if you plan to claim Social Security at 67, and based on your family history and your own health, you estimate that you'll live until about 82, you should multiply your estimated annual benefit by 15. Repeating this process with several starting ages can help you determine which one will provide you with the largest lifetime benefit.
What other factors could affect how much you get from Social Security?
Following the process above can give you a good ballpark of what you might earn from Social Security over 20 years, but it's not going to be completely accurate. For one thing, Social Security has cost-of-living adjustments (COLAs) that increase beneficiaries' monthly checks almost every year to help compensate for inflation. In 2024, checks will rise by 3.2%, bringing the average benefit from $1,841 per month to $1,900 per month.
Future COLAs could push you toward a larger lifetime benefit. That's especially likely if Congress adjusts the formula by which COLAs are calculated so the program does a better job of keeping up with the actual levels of inflation that U.S. seniors face -- a change that many have been advocating for a long time.
But there's also the solvency issue to think about.
The latest annual report from Social Security's Board of Trustees estimates that the program's Trust Funds -- which have been holding its surplus funds for decades -- will be depleted by 2034. After this point, with the program fully reliant on the wage taxes it is bringing in annually, the government will only be able to cover about 80% of scheduled benefits, unless Congress makes changes to the program to increase the amount it brings in before then -- or to cut the amount it pays out.
Likely, Congress will eventually make alterations to Social Security to keep it sustainable for future retirees, but we don't know what that solution will look like. If Congress ultimately decides to cut retirees' benefits, your lifetime benefit could be lower than the estimates you've calculated.
Unfortunately, there is no way to calculate your lifetime benefit with pinpoint accuracy. But it still doesn't hurt to have a rough idea of how much you'll get out of the program. Once you know this, you can subtract that amount from your total estimated retirement costs to figure out how large a nest egg you'll need to build on your own to provide you with the retirement you're hoping for.
