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Home / Business / The most important social security table you will ever see – The Motley Fool

The most important social security table you will ever see – The Motley Fool



Whether you understand it or not, social security is our nation's most important social program. Out of the 63 million benefit controls distributed each month, over 22 million are responsible for raising people above federal poverty levels, which in 2019 is $ 12,490 in an individual's earned income. This opportunity to provide a financial foundation is most prevalent among senior citizens, where the estimated poverty rate will be north of 40% if the program did not exist, according to a Center for Budget and Political Priority Analysis.

However, Social Security is also a program that we tend to lean too heavily on. Although it is only intended to replace about 40% of the average employee's salary under retirement, 62% of current retirement seniors are at least half of their monthly income, while 34% rely on social security schemes that are essentially their sole source of income.

With that said, there is no decision that gives greater importance to the elderly than to decide when to take their benefits.

  A messy pile of six social security cards stacked on top of each other.

Image Source: Getty Images. [19659006] What goes into your calculation of social security schemes?

As a quick update, the Social Security Administration (SSA) has a formula that it uses to determine your monthly payout. This formula takes into account four main factors.

The first two factors – your work history and income history – are linked to the hip. With the SSA using the 35 highest earned inflation-adjusted years when calculating your benefit at full retirement age, it means you want to work for at least 35 years, as well as earn as much as you can in the years you work – up to the maximum taxable payroll – If you want a shot when you maximize your payout. Each year, less than 35 work will result in $ 0 being averaged over your total bill, which will reduce your potential payout.

The third factor is the year of birth, which helps you determine your full retirement age. This is the age at which SSA considers you eligible to collect 100% of your monthly benefit. Claiming at any time before this age means that you accept a permanent reduction to your benefit while waiting until you have full retirement age, it can result in a permanent monthly bonus.

The fourth and final factor is your alleged age, which can undoubtedly have the greatest impact on what you will be paid each month. Pension workers can start at 62 or later. However, it is a pretty big "bonus" if you decide to be patient.

For every year you love, your benefit will grow by about 8% to 70 years. This means that all things are equal (ie work and earnings history and year of birth), someone who claims to be 70 years net can be 76% more per month than anyone who claims to be 62 years old.

  Two social security cards and two $ 100 bills are on top of a social security card.

Picture's source: Getty Images.

The most important social security table you will ever see

For those of you who are more visual teachers, I will introduce you to what may well be the most important social security table you will ever see. It is a set-up that describes what you will receive from the Social Security program based on the year of birth and the age requirement.

For people born between 1943 and 1954, your full retirement age is 66 years. For those born in 1960 or later, it is 67 years. For those of you born between 1955 and 1959, the full retirement age increases by two months per year. For people born in 1955, it is 66 years and two months, for 1956 it is 66 years and four months, and so on until it is attached for 67 years for those born in 1960 or later.

Once you know the full retirement age, you can use the following table to really understand the dynamics of your payout.

Year of Birth Age 62 Age 63 Age 64 Age 65 Age 66 ] Age 67 Age 68 Age 69 Age 70 1943-1954 75% 80% 86.7% 93.3% 100% 108% 116% 116% [%] 19% 124% [132%] 1955 [74.2%] 79.2% [85.6%] 92.2% 98.9% [19659029] 106 , 7% [114.7%] 121.7% [130.7%] [73.3%] 78.3% [84.6%] 84.4% [911%978%1053%1133%1213%1293%
1957
1957 5% [77.5%] 83.3% 90% 96.7% 104% 112% [%] 120% 128% ] 1958 71.7% 76.7% 82.2% 88.9% 95.6% 102.7% 101.7% % 118.7% [12] 6.7% [1959] 70.8% [75.8%] 81.1% 87.8% [94.4%] 101.3% [%] 109.3% [117.3%] 125.3% [1960] or later [70%] 75% [80%] [%] 86.7% [ ] 93.3% [100%] 108% [116%] 124%

Table by author. Data source: Social Security Administration.

Let's look at a few examples, but we first need a baseline. As of January 2019, average retirement benefits for retirees were $ 1,464 per month. Just for your convenience, let's just pretend this is what you will get per month at full retirement age.

First, we have a baby boomer born in 1954 who decides when to take advantage of it. Waiting until full retirement age (66), this person would just get a full payout of $ 1464 a month.

But let's say that they are not in the best of health and decide that the 63-year-old makes sense as a age-old man. At age 63, the table shows that anyone born between 1943 and 1954 will receive 80% of their full pension benefit monthly. Thus, 80% of $ 1,464 is $ 1,171.20 per month. The deviation here is that this person must accept a monthly reduction in the life of his 20% payout, but will receive payments starting years earlier than those who choose to wait.

What about a millennium that is going to retire three decades from now and is therefore part of the "born in 1960 or later" audience? The table above shows that the millenniums have to wait for 67 years to collect the entire $ 1,464 a month, or a whole year longer than many of the early infants. Of course, if they are really waiting for things and claim they are 70 years old, they will get a 24% bonus every month, or $ 1,815.36.

  A baby boomer with thin hair and a striped shirt sitting with his laptop open on his lap and the glasses in the left hand. </p>
<div class=  Image Source: Getty Images. </p>
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<h2><strong>  Monthly Benefits Are Not All </strong></h2>
<p>  Now that you have the knowledge and ability to understand how your full retirement age and claim decision will affect your monthly payout, let me leave you with an extra important suggestion: Don't focus too much on your monthly benefit. </p>
<p>  Deciding when to claim benefits is a personal decision that will involve many variables that are unique to you and you alone. While there are guidelines that can help you decide when to take benefits, it's not like a perfect template that ensures you get the most out of the program. </p>
<p>  Instead, when it comes time to think that your social security claims decision, think of the variables that will allow you to get the most out of the program during your lifetime <em>. For example, if you have excellent health and your immediate family has lived well in the 80's or more, a late claim can be perfect, even if you don't know your life expectancy. Then again, an early claim can be just as profitable for people in poor health, even with permanent reduction in monthly payments. </p>
<p>  Everything is in relation to your variables. Do not forget it. </p><div><script async src=


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