As a Social Security check recipient, all are pretty eager to know about the average amount that one can collect. According to the cost-of-living adjustment (COLA), the average benefit is around $1657 monthly in 2022.
Knowing how the social security amount is calculated and the salary you need can make you reach your target in an even more straightforward manner. Planning on time can help you a great deal later on.
Social Security Amount Calculation
Calculating Social Security amounts is simple. It is based on the total earnings of a person. In a more brief way, an individual’s lifetime earnings are calculated and then adjusted to actual earnings to account for changes in the average wages since you received the year’s earnings. This is usually taken for an average working period of 35 years.
This average amount is then used to calculate the primary insurance amount that one will receive at the full retirement age.
Salary You Need For Maximum Benefit
There is no doubt that every person looks for the maximum benefit when it comes to retirement. While the planning for the same starts quite early, knowing the salary you need for that particular benefit is the first step.
In 2022, $147,000 is the exact amount of salary needed to receive the maximum benefit. But since the amount is calculated based on the 35 highest-earning years, an average of the same amount or more is required every year.
Know The Maximum Social Security Benefit
The most important thing to understand here is that the social security benefit amount is based on the age at which you retire. If you retire in 2022 at your full retirement age (65 or older), your maximum benefit will be $3,345. However, if you retire at the age of 62, your maximum benefit is $2,364. If you retire at the age of 70, your maximum benefit is $4,194.
Social Security benefits are highest when you retire at an older age. Additionally, this gives you an opportunity to make additional savings during the years you work which will serve as the best supplement to your Social Security Amount.
