Posted on 08/02/2018 2:29:04 PM PDT by Red Badger
The maximum monthly Social Security benefit for a person retiring in 2018, at their full retirement age, is $2,788 per month , or $33,456 per year. To achieve this benefit, you must have had the maximum taxable earning for a whopping 35 years. It is for this reason, that most people’s benefits will be far less. Forget this number if you plan to retire ahead of your full retirement age.
Do you think you could live off $2,788 per month? Before you think about that, it’s important to note that the average check for 2018 is just $1,404 per month. I’m going to go out on a limb here and guess that if you are reading this post you would have a rough time getting by on $1,404 per month.
What if I wait until 70 to collect Social Security?
For those of you looking to get the largest Social Security check possible, you will need to wait to begin collecting until you are 70-years-old. To put this in perspective, if you were 70 this year, and receiving the maximum benefit, your check would be about $3,680 or $44,162 per year. This translates into a 32% increase in your monthly benefit. The bad news here is to achieve the maximum Social Security check you would have likely been making six figures for many years. This means that Social Security would cover less than half of your pre-retirement income.
How is Social Security calculated?
(Excerpt) Read more at forbes.com ...
I dunno about you, but I find investing stressful.
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If its not stressful, you’re probably ignoring important risks inherent in ALL stocks. ;)
To be sure, there is a plethora of known and unknown risks that can suddenly derail even the best of companies. Some of the things you can do to lower risks are diversify, buy quality, and avoid overpaying for stocks. Most people buy stocks without having any idea what they are really worth.
Or you can just invest in the S&P 500. Its a well known fact that most mutual managers cannot beat the index over any sustained period of time.
From Politifacts: "According to the institute's data, a two-earner couple receiving an average wage — $44,600 per spouse in 2012 dollars — and turning 65 in 2010 would have paid $722,000 into Social Security and Medicare and can be expected to take out $966,000 in benefits.
That means that, if you live long enough, you will take back something like 34% more than you paid in. Further, if a couple both work and pay into social security, when one unfortunately dies, the remaining spouse only gets to receive the social security benefits of one of them - even though they BOTH paid into it. Thus, the benefits received will likely be significantly less than the total paid in by that couple.
If you invested that same amount of money wisely, you would likely have well over $1.5 to 2 million (maybe more) accumulated from your investment - considering we're talking about at least 25-30 years (likely more) of paying into social security.
In short, FDR and the New Deal screwed over great swath's of the American public, while getting credit for 'helping the people'. Social Security has just turned out to be another revenue source which the pathetic 'know nothings' in DC can squander and exploit.
That said, everyone who has paid into social security should get their benefits, and I'm not in favor of doing anything to the program that would hurt those who have paid in for years and are counting on getting something out. They absolutely deserve their benefits, and much, much more.
Going forward, however, there are only two options that are credible, in my opinion. One would be to REQUIRE the government to take all social security payments from each year and keep them in a separate 'untouchable' investment portfolio run by professional portfolio managers - aiming to get the largest percent return in every calendar year. All this income would go straight back into the social security system, and the amount of each person's contribution would be amplified by the annual rate of return, every year. The second option is to allow people to opt out and invest on their own. If the government were able to perform the first option correctly, the government's investment portfolio and return rate would be similar to or better than the rate of return of individual investors - thus most people would be happy to have the professional social security fund managers do their investing for them, rather than choosing the second option.
Finally, you would get a monthly, or bi-annual report of how much your contributions have increased, and this would be just like having your own personal investment account - with no ability of the government to confiscate or alter your investment return. AND, if you and your spouse pay in, the surviving spouse gets the amount BOTH have put in and earned over the years.
Anything short of that is theft, and immoral.
Unfortunately, only 'earned income' can be put in an IRA. Pensions, Social Security benefits, gains from investments etc., are not considered 'earned income'.
Don’t feel bad, there’s lots to absorb and retain when it comes to the golden years!
I didn’t know but learned that if you enjoy a substantial capital gain, your SS check will be cut. I don’t know for how long yet. Had a $100k cap gain in 2016 and my check got cut by about 13%. Had a larger one in 17 so I may end up with very little SS income at this rate. About 7% of it goes to Medicare. An of course they tax your SS income if you make more than a pittance in other earned income.
Well, you know where the ‘w’ is on the keyboard....right above the ‘s’.
My son took to drugs right out of high school and died at age 36 of an overdose. He never worked a real job in his short life. And yet the one year old little girl he left behind, our new grand daughter, receives $950 a month in SS survivor benefits. She'll receive that until she's 18, I believe. I think it might even help send her to college too.
Now, don't get me wrong. I don't begrudge my granddaughter the money she receives. I'm glad she gets it. Her dad died. She'll need it growing up. Hopefully her mother won't spend it away. They were't married and she's not that reliable.
But my point is, the system pays her over half of my benefits and her dad never worked a steady, full-time job and yet I worked my whole life.
No wonder the system is broke.
Two of my closest Childhood Friends both died at Age 61 from Heart Attacks. They worked their whole lives and they each “contributed” about $250,000 into the SS System.
They don’t care. But if they had spouses, those spouses are getting a death benefit payment every month.
California pension? You probably ought to re-calculate based on what the PBGC would pay when California goes bust and starts issuing script instead of real money.
Interesting article. Thanks for posting.
I weighed the benefits of taking it now vice waiting till 66 and 2 months which would have been my max. Simple calculations said it would take 15 years to make up the difference in what I get now (85) and what I would have taken in at 66 and 2 months so I took it now. I could be dead in 15 years besides that I doubt SS will be around in 15 years.
>>>But if they had spouses, those spouses are getting a death benefit payment every month<<<
One was Unmarried. His Family didn’t even get the $255 to pay for the Urn. That money only goes to the immediate Family, Wife and Adolescent Kids and he had neither.
The other was Married, but his Wife was three Years Older and she worked most of her Adult Life making pretty good Money.
She probably ended up with a $100 a Month bump in her SS Check.
FWIW - Our Financial guy did a Spreadsheet (at my request) of how much Money I would have had at age 66 had all the Money I “donated” to SS for nearly 50 Years had been Invested in the Market. He had to make some assumptions, but none of them include a $25,000 Dow.
He calls me up and says, take a guess how much you would have. I reply, One Million Dollars. He says nope, try again. I say $900,000. He says nope, you’re going the wrong way.
His estimate, somewhere between $2.25 Million and $2.75 Million.
This includes all Monies paid in from me and my Employer (which is just a smokescreen since all the money paid in was part of my Total Compensation. I love how people swallow the false narrative that their Employer “matches” the Employee’s SS Donation. It all comes out of the same Pot but I guess it’s a feel good fantasy to some people..
anyone who has a family business if your kids work to earn spending money while growing up in the business have them pay into social security because the way payments are calculated is from the first payments made so if your 10 year old is being paid to clean the office or pull weeds in the parking lot they can start there social security history...the key is that the formula is number payment periods and the highest rate of pay. what this does is make it so that if for some reason later in life they get disabled and end up on social security at say 38 years of age rather then starting the calculations at 18 for work it starts at ae ten when the kid was working for your business rathe then only 20 years of work on the calculation it is 28 years and rathe then getting maybe 700 dollars a month they et maybe a thousand. this only works for private family businesses because of a waver in the law.....this info is dated by 20 years so it might not be the case now but I thought that it was interesting info
I lost all my boats in a tragic shooting accident
Actually, SS benefits are not affected by capital gains BUT medicare premiums definitely are! SS benefits are only affected by "earned income" when under full retirement age, Medicare premiums are affected by "income". When you have taxable income exceeding $170,000 in a year, your medicare premium goes up, it can rise substantially the higher your income is. However, if it is a "one time event", you can file forms to have it reduced it subsequent years.
Medicare premium brackets — see table.
https://medicare.com/about-medicare/medicare-premiums-deductibles-2018/
Too hard for me at that site. Do they give SS to people who only worked a few years in the USA? I wasn’t expecting anything but I wonder.
“I waited until 70 and now 5 years on I’m not doddering”
you can count yourself amongst the very few lucky ones of that age ... good genes and/or healthy living ...
I love how people swallow the false narrative that their Employer “matches” the Employee’s SS Donation. It all comes out of the same Pot but I guess it’s a feel good fantasy to some people.
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Good point. People believe what they WANT to believe. Reality is conveniently and often overlooked.
That is a sad story and quite unfair.
What leftists touch, they always ruin.
I retired the year I turned 66, but before my 66th birthday. So, my SS benefit is based on my age at the time of my retirement, as I opted to take it at that time. So, my benefit is just a few dollars shy of what I would have received had I waited until my 66th birthday to begin receiving SS. To me, time is more valuable than money (I’m a cancer patient, but presently in remission), so it was a no-brainer retiring six months before I reached my full SS retirement age. I also receive four pensions from private employers, plus I have CDs and savings, and I have no debt (house is all paid off and I paid cash for my truck). The biggest expense is paying for my wife’s medical insurance, as she is six years younger than me and has been a homemaker for over 25 years (thus, she has no employer-sponsored medical coverage).
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