Millions of people rely on Social Security for the bulk of their retirement income, but few understand exactly how their benefits are calculated. Given how important Social Security is, you owe it to yourself to take a few minutes to get the details on the amount of your monthly check and what you can do to make it bigger.
In the following video, Motley Fool investment planning editor Lauren Kuczala talks with longtime Fool contributor and retirement expert Dan Caplinger about the intricacies of the process for determining Social Security benefits. Dan runs through the complicated formulas, starting by determining average monthly earnings and then applying the graduated rate schedules to help you come up with your base benefit. However, while that base amount applies if you retire at your normal full retirement age, taking benefits earlier or delaying them until later also has an impact. Given that, the amount you earn in your peak career years can make a huge difference to your eventual benefit.
Editor's note: The volume in the video is low at times. The Fool regrets any inconvenience.