Social Security Benefit: How Much Should Senior Citizen Expect to Receive?

Generally, a lot of people are scared of getting old. But for people in the United States, ages 66-67 are considered magical numbers as this is when people of this age become eligible to start receiving their Social Security Retirement Benefits.

Before, the full retirement age was 65 but was eventually changed to 66-67. According to the Social Security Administration, there are nine out of 10 people ages 65 and older who at present are receiving their benefits.

According to the SSA, by 2035, due to the rising numbers of Americans 65 and older, they expect that the number will rise from 56 million to over 78 million.

Well, once you reach the age of 65, you can assume that you can live for another 20 years which makes it important to maximize your Social Security Benefit.

If you are not sure how to do that, here is advice from financial experts on how you can maximize your Social Security benefit and how much is the amount you can expect to receive.


Average Senior Citizen – Expected Benefit from Social Security

In December 2020, according to AARP, the monthly maximum benefit that a senior citizen can receive in 2021 at their full retirement age, which is 66 years and 2 months, is $3, 148 while for senior citizens aged 70, they can expect a maximum of $3, 895.

But, as per the Social Security benefit, the average monthly benefit for retirees in July 2021 was only $1, 556.72.

“It’s important to remember that years worked when you collect and other factors will determine your monthly Social Security benefit. Social Security benefits are different for each and every person,” said John Hill, president and CEO of Gateway Retirement.

If you are wondering what the expected benefit means in terms of a secured future, Wilson Coffman, president of Coffman Retirement Group in Huntsville, Alabama said, “Social Security was established to replace only 40% of pre-retirement earnings. The current funds that pay Social Security benefits have been running low and projections say those funds could run out by 2035. It is very important to create multiple income streams to replace the other 60% of pre-retirement earnings. Some options to consider would be placing retirement accounts, such as IRA or 401(k) accounts, in fixed index funds with income rider options or other annuity products that provide income streams.”

Tips to Maximize your Social Security Benefit

 According to Greg Middendorf, CFP, of HCM Wealth Advisors, navigating social security income can be complicated but he gives some strategies and tips on how you can maximize your benefits.

  • Work at least 35 years

“The Social Security Administration looks at your average monthly income over your 35 highest-earning years when calculating your benefit,” Middendorf said. “You can still get checks even if you didn’t work that long, but you might be disappointed in the amount. Those who haven’t worked for at least 35 years have zero-income years included in their benefit calculation, and even one of these can significantly reduce your checks.”

  • Check your earnings record

“[Do this] at least once per year to make sure that everything there appears accurate,” he said. “Just remember, the figures listed there show what you’ve paid Social Security taxes on, which isn’t always the same as your income. In 2021, for example, you only pay Social Security taxes on the first $142,800 you earn. In prior years, this number was lower. So high earners may find their earnings record doesn’t reflect their income at all, but it could still be correct.”

“If you do notice a mistake, you can submit a Request for Correction of Earnings Record form to the Social Security Administration, along with any documents you have that prove your income for that year,” Middendorf advised. “The Social Security Administration will evaluate your request and update your earnings record if appropriate.”

  • Choose your benefit age carefully

“You can claim Social Security as soon as you turn 62, but if you want the full amount you’re entitled to based on your work history, you have to wait until your full retirement age (FRA),” Middendorf said. “That’s 66 for those born between 1943 and 1954. Then, it rises by two months every year thereafter until it reaches 67 for those born in 1960 or later.

“Every month you receive benefits before this age reduces your checks by anywhere from 5/12 of 1% per month to 5/9 of 1% per month. That might not seem like much, but it adds up over time. Those who start Social Security at 62 only get 70% of their full benefit per check if their FRA is 67, or 75% of their FRA is 66.

“But this process also works the other way. Delaying benefits past your FRA increases your checks by 2/3 of 1% per month until you hit 70. After that, your checks won’t increase anymore. Those with an FRA of 67 can get up to 124% of their full benefit per check, while those with an FRA of 66 can get up to 132%.”

As previously mentioned, the Social Security Benefit was established to replace only 40% of pre-retirement earnings.  So aside from the Social Security Benefit, how much money should you have or earn in advance for retirement?

“Evaluating how much money you will need to retire has multiple variables depending on each household lifestyle,” Coffman said. “What is the cost-of-living expense in each individual home? The biggest expense is health care cost and usually traveling within the first five years of retirement.

According to Justin Nabity, CFP and founder and CEO at Physician’s Thrive, an accepted rule of thumb for planning your retirement is you must have at least 80% of the annual salary you earned at work.

“This is sometimes referred to as replacement income. Therefore, if you earn $100,000 a year at work, you need at least $80,000 a year to retire. This is the beginning. Multiply this number by your average life expectancy after retirement to arrive at the minimum total amount you need. Anything above that limit and you are usually in good terrain financially.”

Read More: Next Year’s Social Security Checks May Get Highest COLA Hike In 13 Years

Read More: How Much Will You Get If Social Security Funds Run Out In Next Few Years?