# My Social Security Benefits Calculator

## Primary Insurance Amount Calculation

How to Calculate Your Social Security Benefits

For 2022, the SSA established the first bend point as \$1,024 and the second bend point as \$6,172. Using the AIME from the earlier example of \$10,141 and the bend points, we can calculate the primary insurance amount .

Below are the steps to calculating the PIA:

• Multiply the first \$1,024 of the person’s AIME by 90% = \$921.60
• Subtract the 1st and 2nd bend point and multiply that difference by 32% = \$5,148*.32 = \$1,647.35*
• Subtract the 2nd bend point amount from the total AIME amount and multiply the difference by 15%. = \$3,969*.15 = \$595.35

*Please note that the calculation results are required to be rounded down to the next lower multiple of 10 cents.

• The PIA is the sum of the three calculation results: = \$3,164.30

*The multipliers90%, 32%, and 15%are set by law and do not change annually. The bend points are inflation-indexed but only through age 62. PIA is effectively locked in at age 62.

## Are Social Security Benefits Taxable

If you have a lot of income from other sources, up to 85% of your Social Security benefits will be considered taxable income. If the combination of your Social Security benefits and other income is below \$25,000, your benefits wonÃ¢t be taxed at all. The amount of your benefits that is subject to taxes is calculated on a sliding scale based on your income. Money that Social Security recipients pay in income taxes on their benefits goes back into funding Social Security and Medicare.

If your retirement income is high enough that your benefits are taxable, how do you pay those benefits? You can ask Social Security for an IRS Voluntary Withholding Request Form if youÃ¢d like the government to withhold taxes from your Social Security benefits. Otherwise, youÃ¢re expected to file quarterly tax returns to pay these taxes over the course of the year.

That covers federal income taxes. What about state income taxes? That depends. In 12 states, your Social Security benefits will be taxed as income, either in whole or in part the remaining states do not tax Social Security income.

## Social Security Quick Calculator

This quick and most basic tool on the SSA website asks for your date of birth and current yearly earnings. It then gives a rough estimate of how much your future checks might be. This is based on the amount of time you have to save, at the rate of income that you earn now.

Take note: This tool comes up with your earnings based on data that you provide. It does not access your true earnings record, and cannot predict what you might make years from now. You may even change career paths. So even though it comes from the SSA, it may not match what you see down the line on your checks or statement.

You can look at a recent pay stub to see how you’re paying into your future each time you get paid. After gross wages at the top, you’ll see all the things that are taken from your earnings. Taxes will take a few line items, and your SSA benefit will show up here as “FICA SS Tax,” or a close version of that.

One thing to keep in mind is that the amount they predict assumes that you will keep working until the standard age of 65, which is when most people retire. There’s no way to adjust this default if you plan to retire before age 65, or much later. Also, this figure won’t reflect any changes in dollars to adjust for inflation. This is a shame because it causes many people to lowball how much they could receive in the future by waiting until age 70 to begin their claim.

There are three major factors that affect the dollar amount on your future monthly checks from the SSA:

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## Do You Expect To Live A Long Life

#### Claiming at your full benefit age could still make sense for you.

We understand it’s difficult to make predictions. You may want to plan for the possibility that you may spend 20 or more years in retirement. On average, a woman reaching age 65 today will live to age 87, and a man will live to age 84. Waiting to claim as long as you can could still make sense for you if you are married, are the higher earner in the household, and want your surviving spouse to keep the highest monthly benefit after you die. Remember, you can claim at any point between age 62 and 70. Each additional month that you wait to claim gives you a permanent increase in your monthly benefit which becomes more valuable as you age.Calculate your longevity.

## What Does Aarps Social Security Calculator Do

The calculator provides an estimate of your Social Security benefits, based on your earnings history and age. Our tool also helps you see what percentage of daily expenses your payments can cover, and how you can increase your benefits by waiting to collect. It can also tell you how your retirement earnings will be affected if you keep working after you claim your Social Security benefit.

Read Also: How To Claim Retirement Benefits

## Tool To Check Retirement Age

Your FRA depends on the year you were born, and it’s easy to check online.

The SSA’s retirement age calculator lets you to put in your birth year to quickly find out the exact age you will be eligible to claim the full benefit.

The tool also explains how much your benefits will be reduced by if you claim early, depending on the year and month.

## Aarp Social Security Calculator

The AARP Social Security calculator is a basic calculator that provides a graphical depiction of how much your monthly benefit is depending on when you choose to collect. The calculator also provides information on how much of your living expenses your Social Security benefits will cover.

The major drawback of this calculator is that it determines your monthly benefit with your average annual salary, so it might not be entirely accurate if your estimate of your average annual salary is not correct. The calculator also determines cumulative benefits based on if an individual collected at age 70, a goal that may not be realistic for many.

Also Check: What Are The 3 Main Types Of Social Security Benefits

## What A Social Security Break

In a nutshell, a Social Security break-even calculator can tell you when the best age is to start taking Social security benefits, in terms of how much money you could expect to receive over time. Going back to the previous example, lets assume that you track your benefit amounts over a 10-year, 20-year and 30-year period. Heres how your total benefits received would look over each of those periods, for all three starting points.

Your cumulative benefits after 10 years:

• \$144,000, starting at age 62
• \$122,400, starting at age 66
• \$52,800, starting at age 70

Your cumulative benefits after 20 years:

• \$288,000, starting at age 62
• \$326,400, starting at age 66
• \$316,800, starting at age 70

Your cumulative benefits after 30 years:

• \$432,000, starting at age 62
• \$530,400, starting at age 66
• \$580,800, starting at age 70

You can see that youd draw the most Social Security benefits in total if you wait until age 70 to start taking them, assuming you live to age 100. But that could be a big if when youre not in the best health.

What you have to keep in mind when using a Social Security break-even calculator is that the numbers are hypothetical. They dont take into things that could affect your ability to draw benefits or how far those benefits might go, such as:

## Do You Expect To Have Additional Sources Of Retirement Income Beyond Social Security

How To Calculate Social Security Benefits [3 Easy Steps]

#### Continue saving in the coming years.

Social Security won’t replace all of your pre-retirement income. On average, Social Security replaces 40 percent of a worker’s income. That means your retirement savings, pension, 401, or Individual Retirement Account will need to fill the gap. Claiming at your full Social Security benefit age or later can minimize this gap and maximize your monthly benefit. If you claim before your full retirement age, your monthly benefit could be reduced by as much as 30 percent.Learn more about saving for retirement.

#### You have an opportunity to continue growing your money.

If you can, get the highest monthly Social Security benefit possible by claiming at your full Social Security benefit age or later. If you claim before your full retirement age, your monthly benefit could be permanently reduced by as much as 30 percent. Also, take advantage of catch-up contributions to your 401 or Individual Retirement Account . Lastly, avoid losing your retirement savings to unnecessary tax penalties. If you withdraw your 401 or IRA savings before age 59Â½, you will likely face an early withdrawal penalty.Learn more about how retirement savings grow.

#### It’s never too late to start saving!

A type of retirement savings account offered by employers to help their employees save for retirement.

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## How Does The Social Security Administration Calculate Benefits

Benefits also depend on how much money youÃ¢ve earned in life. The Social Security Administration takes your highest-earning 35 years of covered wages and averages them, indexing for inflation. They give you a big fat Ã¢zeroÃ¢ for each year you donÃ¢t have earnings, so people who worked for fewer than 35 years may see lower benefits.

The Social Security Administration also makes annual Cost of Living Adjustments, even as you collect benefits. That means the retirement income you collect from Social Security has built-in protection against inflation. For many people, Social Security is the only form of retirement income they have that is directly linked to inflation. ItÃ¢s a big perk that doesnÃ¢t get a lot of attention.

## How Inflation Impacts Your Pia

Your PIA is calculated at age 62. If you wait beyond age 62, cost-of-living adjustments will be applied to your PIA for each year afterward.

If you have already had most of your 35 years of earnings, and you are near age 62 today, the age 70 benefit amount you see on your Social Security statement will likely be higher due to these cost-of-living adjustments. Many people do not account for this when doing their own calculations, which can lead them to think that taking Social Security early is a better deal, when waiting is often the better deal.

In the table below, our hypothetical worker, born in 1954, is eligible for full retirement at age 66. The column on the right shows the effect of inflation for waiting beyond age 62 to take their benefits.

Effect of Age on Claiming Benefits
Year

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## When Will You Collect

The SSA calculates your benefit amount at your full retirement age . This depends on the year you were born. FRA by birth year is:

• 19431954: age 66
• 1955: age 66 and two months
• 1956: age 66 and four months
• 1957: age 66 and six months
• 1958: age 66 and eight months
• 1959: age 66 and 10 months
• 1960 and later: age 67

The monthly amount you are eligible to receive at your FRA is considered your full benefit, but it is not your minimum or maximum benefit.

You have the option to file for early retirement as early as age 62. But, you may choose to delay taking your benefits until as late as age 70.

There are many reasons why you might choose to take early retirement or to delay it. That choice has a direct impact on the amount of your monthly payment. If you opt for early retirement, you are choosing a lower monthly payment for the rest of your life. By choosing to delay your benefit to any age between your FRA and age 70, you lock in an increase.

## Who Is Eligible For Social Security Benefits

Anyone who pays into Social Security for at least 40 calendar quarters is eligible for retirement benefits based on their earnings record. You are eligible for your full benefits once you reach full retirement age, which is either 66 and 67, depending on when you were born. But if you claim later than that – you can put it off as late as age 70 – youÃ¢ll get a credit for doing so, with larger monthly benefits. Conversely, you can claim as early as age 62, but taking benefits before your full retirement age will result in the Social Security Administration docking your monthly benefits.

The bottom line: YouÃ¢re eligible for Social Security Benefits if youÃ¢ve paid into the system for at least a decade, but your actual benefits will depend on what age Ã¢ between 62 and 70 Ã¢ you begin to claim them.

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## Can I Use The Calculator To Figure Out Social Security Disability Insurance And Supplemental Security Income

No. SSDI is aimed at people who cant work because they have a medical condition expected to last a year or more or result in death. Your SSDI benefits last only as long as you suffer from a significant medical impairment while not earning significant other income.

SSI is a separate program for people with little or no income or assets who are 65 or older, as well as for those of any age, including children, who are blind or who have disabilities. The maximum monthly SSI payment for 2022 is \$841 for a single person and \$1,261 for a couple. But some states add to that payment, and you may receive less than the maximum if you or your family has other income. Get more information about SSDI and SSI from the Social Security Administration.

## How Are Social Security Benefits Calculated

The Social Security Administration uses your average monthly earnings from up to 35 years of work history to calculate your “primary insurance amount,” or the benefit you’d receive at full retirement age. That calculation includes income up to the “taxable maximum” amount, which is \$147,000 for 2022.

After determining the number of years worked, Social Security chooses the years with the highest earnings, taking inflation into account, takes the sum of those earnings, and then divides it by the total number of months worked during those years. The resulting average is then rounded down to the next lower dollar amount.

Your earnings are then indexed so that future benefits are reflected in the current standard of living to help offset inflation. This “average indexed monthly earnings” number is then used to calculate your monthly benefit. The maximum Social Security benefit for someone at full retirement age in 2022 is \$3,345.

If you are a spouse or ex-spouse of someone who has contributed to Social Security through taxes, you may be able to claim part of their benefits. You can either choose to receive that share or a payout based on your own work history, depending on whichever amount is greater.

The Social Security Administration provides calculators for estimating your future benefits. Creating a My Social Security account online is a great way to see your current benefits or expected payouts for when you plan to retire.

Also Check: What Is Social Security Death Benefit

## Windfall Elimination Provision Calculator

The Windfall Elimination Provision is poorly understood and catches a lot of people by surprise.

This calculator will tell you:

• The amount of Social Security benefit you can expect after the WEP reduction
• The number of substantial earnings years you already have
• How additional years of substantial earnings will affect the WEP penalty

## How To Calculate Social Security Benefits

How much your Social Security benefits will be if you make \$30,000, \$35,000 or \$40,000

This article was written by Jennifer Mueller, JD. Jennifer Mueller is an in-house legal expert at wikiHow. Jennifer reviews, fact-checks, and evaluates wikiHow’s legal content to ensure thoroughness and accuracy. She received her JD from Indiana University Maurer School of Law in 2006.There are 10 references cited in this article, which can be found at the bottom of the page. This article has been viewed 64,893 times.

Understanding how much you’ll receive each month in Social Security benefits is a big part of retirement planning. The average is around \$16,000 a year, but the actual amount you’ll receive depends on how much money you’ve put into the system. The Social Security Administration and other groups have online calculators that can help you estimate your benefits, but to calculate them more exactly you’ll have to calculate your average indexed monthly earnings to find your primary insurance amount. This amount must then be adjusted up or down to account for the age you decide to retire.XResearch source

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