I'll be turning 66 soon and plan to apply for my Social Security retirement benefits. But I'm curious about something: How will Social Security figure out how much money to send me each month?
Thank you for this interesting question. I'll explain how the folks at Social Security arrive at the magic number, but don't be surprised if the explanation gets a bit complicated. Fortunately, there are computers that do all the necessary calculations. It's worth noting that Social Security has had a lot of practice at this task.
In June of last year, there were Hold on a minute, please! Before we get into questions like that, let's review a couple of basic concepts that will affect your benefit. The first is that a Social Security benefit is an earned benefit. It's not a freebie.
We Americans earn our benefits by working for many years and paying the Social Security tax in each of those years. That tax is 6. Plus, your employer matches the 6. You also pay 1. To even be eligible for retirement benefits, you generally need 10 years 40 quarters of gainful employment. A final basic concept that will affect your benefit is that, in principle, the more money you earn during your working years, the higher your benefit will be. There are limits to how high it can go, however, because wages above the ceiling aren't subject to Social Security tax and aren't counted in your benefit calculation.
OK, now that we know the rules of the retirement road, let's see how Social Security figures out the dollars and cents that become your monthly benefit. Each year that you've worked and filed an income tax return, your income figure has been transmitted to the Social Security Administration to become part of a crucial piece of bookkeeping known as your work record.
The figures in this record will form the basis of your benefit. But first, they undergo some numerical kneading to produce a calculation called average indexed monthly earnings AIME.
The purpose of the calculation is to adjust your career earnings to reflect the changes in general wage levels that took place during the years of your career. Social Security says that the adjustments "ensure that a worker's future benefits reflect the general rise in the standard of living that occurred during his or her working lifetime.
The next step is to calculate your all-important primary insurance amount PIA. It represents your basic retirement benefit at full retirement age — 66 for people born between and You can also manage your communication preferences by updating your account at anytime. You will be asked to register or log in. In the next 24 hours, you will receive an email to confirm your subscription to receive emails related to AARP volunteering. Once you confirm that subscription, you will regularly receive communications related to AARP volunteering.
In the meantime, please feel free to search for ways to make a difference in your community at www. Javascript must be enabled to use this site. Please enable Javascript in your browser and try again. Now Reading:. Membership My Account. Rewards for Good. Share with facebook. Share with twitter. Share with linkedin. Share using email.
You may not have enough credits from your work in the United States to qualify for retirement benefits. But, you may be able to count your work credits from another country. The SSA has agreements with 24 countries. If you earned credits in one of those countries, they can help you qualify for U.
Find out how to report your lost, missing, stolen, or expired government check. And learn why you received a check or direct deposit payment and how to make a payment to the government. Report your lost, missing, or stolen federal check to the agency that issued the payment. It's usually one of these paying agencies. If your documentation indicates it's a different agency, and you need its contact information, look in the A-Z Index of U.
Government Departments and Agencies. To get an update on your claim, contact the Treasury Department Philadelphia Financial Center at , option 1. Then contact that RFC to find out which federal agency authorized the payment. It will be one of these:. If you received payment by electronic funds transfer EFT , or direct deposit, follow the directions under Find Information About a Payment.
Use the Treasury Check Verification System to verify that the check is legitimate and issued by the government. Learn how to use Pay. You can use the online service for VA medical care copayments, U. Coast Guard merchant mariner fee payments, and more. If you need help, contact Pay.
You must report the death of a family member receiving Social Security or Medicare benefits. Find out how you can report a death and how to cancel benefit payments.
0コメント