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how much money do you get from social security
11 Jun 2020

How Much Money Do You Get From Social Security? The Complete Guide

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Are you wondering how much money do you get from social security? In 2019, around 64 million people received over 1 trillion dollars in Social Security benefits.

In this article, explore the answer to your question plus an overview of Social Security. Read on to better understand what you can realistically expect for the future.

What Is Social Security?

Social Security is an economic option for millions of Americans. Not only does it help retirees, but those who are disabled, and families of those who are deceased or disabled. You pay into Social Security every month while working in case you need this money later.

Workers pay into the program and then money goes out as monthly income to those who need it. It’s different from pensions which are considered pre-funded. For pre-funded programs, the money is collected ahead of time so it’ll be available for workers when they retire.

These pre-funded plans protect employees in case the company goes out of business or bankruptcy. In order to qualify for Social Security retirement benefits, you have to be at least 62 and paid into the system for at least 10 years.

The History of Social Security

Social Security was started by President Franklin D. Roosevelt on August 14, 1935, with what was known as the Social Security Act. He signed it into law guaranteeing income for retirees and the unemployed. It was developed during the Great Depression, which was the nation’s worst economic crisis.

He also created the Civilian Conservation Corps and the Works Progress Administration. It was first created as more of a way to fight unemployment, but later became protection for the disabled and retired. It also gives death benefits to the dependents of taxpayers.

Is Social Security Based on Income?

For those workers who are close to retirement and wanting their SS check, they’ve been paying money into Social Security for decades. If you calculate the time value of the money from your contributions, your total contributions could be twice as much.

To calculate how much you’ll receive, they take your lifetime earnings for your entire working career. Your 35 highest years of earnings will then calculate your first monthly benefit.

Your 35 years of benefits are then averaged and divided by 12 to calculate your average indexed monthly earnings (AIME).

Maximum Social Security Payouts

The maximum social security payout if you retired at full retirement age was $3,770 in 2019. You’d need to earn the max taxable amount which is $137,700 for 2020 over a 35-year career to receive this.

If you delay when you’ll receive social security, then you’ll become eligible for higher payments. If you wait until past age 66, you’re able to receive payments over $3,000 per month. If you don’t work for a period of time during 35-years, then you’ll receive 0s into your calculation which will minimize how much you’ll receive.

How Does Social Security Calculate Your Benefits?

When you’re wondering how much Social Security you get, keep in mind there are a few things taken into consideration:

  • Inflation
  • How old you are when you take your benefits
  • How long you’ve worked
  • How much you make yearly

You’ll first need to take your earnings for your AIME (as described above). Next, you’ll use your AIME to determine your Primary Insurance Amount (PIA). Then, you can adjust it for your age to see when you’ll begin benefits.

When calculating your AIME, ensure you adjust each year for inflation. You can use the indexing earnings chart on the Social Security Administration website. The Social Security Administration will then use your highest 35 years of earnings to determine your average monthly earnings (AIME).

Next, to calculate your PIA you’ll need the Bend Formula Bend Points which you can find on the Social Security website as well. If you’re not 62 yet, it’s just an approximation. Your PIA will be affected by inflation and higher earnings.

If you earned a higher amount in between the ages of 62-70, this will change your AIME which calculates your PIA. On the Social Security website, you can check yearly to see the Current Historical Cost of Living Adjustment Rates.

Your PIA is rounded to the next lowest amount. Once calculated, then inflation is done. Your PIA is supposed to replace 90% of the AIME.

Reduction Formula

When calculating your age adjustments with your PIA, this is the amount you’ll receive at your Full Retirement Age (FRA). This can change based on the year you’re born. The reduction is then placed on your PIA If you start benefits before your FRA.

If you start your benefits after your FRA, you’ll receive a delayed retirement credit. Starting before your FRA, your benefits are decreased by 5/9 of 1% per month. This will last until you reach your FRA or up to 36 months.

Once you’re past 36 months, you’ll then receive 5/12 of 1%. If you decide to file after your full retirement age, then you’ll receive more PIA. The delayed retirement credit is 2/3 of 1% of your PIA which is about an 8% increase each year.


The cost of living adjustments will affect your PIA along with your age. The amount you receive can increase based on the current cost of living. Waiting until you reach a higher age can be a better deal than signing up for Social Security early.

How Much Money Do You Get From Social Security?

When answering the question, how much money do you get from social security, you need to factor in your age, income, and inflation.

Are you currently struggling to pay your bills and don’t have time to wait for Social Security? Apply for a personal loan today and dig yourself out of debt.