The average retiree currently receives about $1,328 per month from Social Security, and the maximum you could get if you're reaching your full retirement age in 2015 is $2,663. Those numbers are reasonable, but unless you're exactly average or have been a high earner for decades, they don't tell you what you will get from the program when it comes time for you to collect.
Social Security's payments are personalized based on a fairly complex formula, which changes each year based on things like changes in the Consumer Price Index and the national average wage index. That makes it hard for you to estimate on your own what you'll get from the program when it's time for you to start collecting. Still, it's important to figure out, as Social Security will likely play a significant role in your retirement, and you'll want to have a feel for what you'll need to save to cover what it won't.
How can you get close to reality?
If it seems frustrating, it may help to know that you're not alone. Not even the Social Security Administration knows with 100% certainty what you'll get until you actually file for benefits. Social Security offers online tools and estimators to help you get close. You can use those tools for anything between a sweeping generality to a precise best estimate, depending on what you're looking to do.
If you're looking for Social Security's best estimate of your benefits based on your earnings history, you can use its "Retirement Estimator" tool, located at this link. So long as you've earned enough credits to qualify, that tool will use your earnings history and Social Security's projections for the future to tell you what it thinks you'll get.
To get a similar estimate, you can also sign up for your own "my Social Security" account. In addition to providing you ongoing access to your estimate, having an account will let you manage your benefits and get a letter with proof of your benefits if you are already receiving them.
Social Security also offers several other calculators to help you estimate different scenarios:
- A Quick Calculator that lets you plug in your current earnings, birth date, and expected retirement date to run an estimate based on typical projections for a person in that situation.
- A Life Expectancy Calculator that will provide a rough estimate of the lifespan a typical person of your age and gender has remaining, based on your gender, birth date, and actuarial tables. This can be useful when you're planning for retirement and need to figure out how big a nest egg you'll need to cover what Social Security won't.
- A Retirement Age Calculator that will tell you, based on your birth date, what your full retirement age is and how your benefits will change based on when you start collecting them.
- A Retirement Earnings Test Calculator that will help you understand how your benefits will get reduced if you're below your full retirement age, working, and collecting Social Security.
- An Early/Late Retirement Calculator that will let you see what portion of your primary benefit amount you'll get depending on when you choose to retire and start taking Social Security.
- A Spousal Benefits Calculator that will let you see what portion of your spouse's benefits you can receive if you're expecting to collect based on your spouse's earnings record.
It's your retirement -- take control
Social Security's estimates are an excellent source for you to get a ballpark figure of what you can expect from the program, at least as long as its Trust Funds hold out. What any estimate will tell you, though, is that while Social Security provides a great foundation for your retirement, it likely won't be enough all by itself to cover your costs in your golden years.
So take the estimates and use them to help you understand not only what you can expect from Social Security, but also what you'll need to cover on your own to fund the retirement you'd like to have. Between Social Security, any pension you may get, and your own savings, a decent retirement may well be within your reach. Check your estimate and use it to get started now on your end-to-end plan for your future.