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How Are My Benefits Calculated?

November 20, 2020
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Your Social Security benefit amount is based on your work history, specifically your 35 highest years of salary. he key to earning Social Security benefits is to work at least 10 years to qualify for benefits and then try to pack in 35 years of earnings. Once your work history is determined, a complex formula is used that considers your age, amount of earnings, and inflation assumptions. You can learn more about this calculation by clicking here.

The Social Security Administration offers a Social Security Quick Calculator you can use to get a rough estimate of future benefits. You can enter your birthday, current earnings, future retirement date, and whether you’d like to see the results in today’s dollars or inflated (future) dollars. For example:

  • Birthday: February 28,1960
  • Current earnings: $65,000
  • Future Retirement Date: June 2027
  • Monthly Benefit Amount in Today’s Dollars: $1,737
  • Monthly Benefit Amount in Inflated (Future) Dollars: $2,483

In addition to your own benefits, other people in your family will also qualify for benefits based on your work history. These additional benefits include those for your spouse and dependents. While there are numerous benefits for your family members, there is an overall family maximum that you can receive.

It may be time to discuss your Social Security benefits, how they’re calculated, and your retirement strategy. Please reach out today to get started.