Social Security Max monthly benefit

[G-Man]

I have been using a number of Retirement Planning tools to estimate my social security benefits when I turn age 70 in 13 years. Most of the tools are indicating that I will receive around $70K per year in social security benefits in 13 years.

Today, a monthly benefit of $4,555 is the maximum Social Security will pay.

https://www.usatoday.com/story/mone...laim-max-social-security-benefit/69975211007/

I assume the max monthly benefit will increase each year and in 13 years it will not impact me from getting $70K per year in Social Security benefits.

 

[Texas Proud]

I would say not.. usually they do not have an inflation factor in estimated SS payments...


Now, are you married and they are adding in spouse?

 

[SevenUp]

I assume the max monthly benefit will increase each year....

If the National Average Wage Index continues to increase, and the SS Cost-of-Living Adjustments are greater than 1 for 2029 (the year after you turn 62) and beyond, then your assumption may be correct.

 

[G-Man]

I would say not.. usually they do not have an inflation factor in estimated SS payments...


Now, are you married, and they are adding in spouse?

Yes, I'm married. That $70K does not include my wife's SS benefits. In the Retirement planning software, her SS benefit at age 70 is around $27K per year.

So, as a couple, is it possible to get approximately $100K in SS benefits in 13 years (I will be 70 and my wife will be 73).

 

[gauss]

So, as a couple, is it possible to get approximately $100K in SS benefits in 13 years (I will be 70 and my wife will be 73).

Those are the type of figures that I am seeing TODAY, for DW and myself, combined, when I start claiming at age 70 (ie a bit more than 10 years from now). The actual amount will be larger to ~10 more years of inflation increases.

Unfortunately dual earner couples get hosed under current law IMHO, when the first of the couple passes away and the surviving spouse only receives the largest of the 2 SS checks. A 1M term life insurance policy on each of us would serve to mitigate this risk.

-gauss

 

[G-Man]

Those are the type of figures that I am seeing TODAY, for DW and myself, combined, when I start claiming at age 70 (ie a bit more than 10 years from now). The actual amount will be larger to ~10 more years of inflation increases.

Unfortunately dual earner couples get hosed under current law IMHO, when the first of the couple passes away and the surviving spouse only receives the largest of the 2 SS checks. A 1M term life insurance policy on each of us would serve to mitigate this risk.

-gauss

I'm just wondering if we will get hit with the Social Security benefits cap.

 

[SevenUp]

I'm just wondering if we will get hit with the Social Security benefits cap.

Which cap?

 

[Exchme]

The $70K is a nominal number and has to be adjusted down based the inflation guess that was input. I would use the $4550 as the real. That may turn out slightly conservative as you will get the National Wage Index adjustment (generally better than COLA) until you are 60, but then you skip a year with only partial COLA as only the bend points are adjusted and after that you get COLA adjustments for inflation. So the $4550 (real) will be pretty close to your benefit at age 70.

Don't forget to go to opensocialsecurity.com for a look at the combined claiming strategy.

 

[G-Man]

Which cap?

I guess you call it a cap.

https://www.usatoday.com/story/mone...laim-max-social-security-benefit/69975211007/

 

[SevenUp]

I'm just wondering if we will get hit with the Social Security benefits cap.

Which cap?

I guess you call it a cap.
https://www.usatoday.com/story/mone...laim-max-social-security-benefit/69975211007/

That story talks about the wage cap: the maximum amount of earnings credited each year toward determining your benefits.

After your benefit has been determined, other than WEP or GPO - if either or both pertain to you - I don't recall there being a cap that would reduce your benefit.

 

[G-Man]

That story talks about the wage cap: the maximum amount of earnings credited each year toward determining your benefits.

After your benefit has been determined, other than WEP or GPO - if either or both pertain to you - I don't recall there being a cap that would reduce your benefit.

Sorry for the using the word "cap".

At 4:50 in this video, it uses the word "cap".

 

[gauss]

+1

Legally, there is no SS payout cap, that effects everyone, under current law. It simply doesn't exist.

The maximum payout each year that year hear about in the media is for a individual that had earnings in excess of the withholding cap each year for 35 years.

Now certain earners may be subject to additional restrictions that could effect you such as the WEP / GPO mentioned above. I don't have knowledge of these other than I don't think they apply to my private sector earnings and we have nobody on disability in the household.

-gauss

 

[aaronc879]

Those are the type of figures that I am seeing TODAY, for DW and myself, combined, when I start claiming at age 70 (ie a bit more than 10 years from now). The actual amount will be larger to ~10 more years of inflation increases.

Unfortunately dual earner couples get hosed under current law IMHO, when the first of the couple passes away and the surviving spouse only receives the largest of the 2 SS checks. A 1M term life insurance policy on each of us would serve to mitigate this risk.

-gauss

How is that "getting hosed"? Why would you get two checks for one person? It is bad enough that someone who had low earnings can get many years of high payments because they had a high earning spouse. You should only get what you earned or a flat minimum equal to the poverty line.

 

[Romer]

You had said you would get $70K and your wife $27K. If she went for spousal she would get half of yours at $35K. Something to look into

 

[G-Man]

You had said you would get $70K and your wife $27K. If she went for spousal she would get half of yours at $35K. Something to look into

Well. She is 3 years older than I am. She plans to take her SS benefits at age 62 (in 2 years).

Since I am the higher earner, I play to delay SS benefits until age 70.

 

[SevenUp]

Sorry for the using the word "cap".

Don't worry about that. Semantics aside, has your question been answered?

 

[pb4uski]

.... Unfortunately dual earner couples get hosed under current law IMHO, when the first of the couple passes away and the surviving spouse only receives the largest of the 2 SS checks. ...

How is that "getting hosed"? Why would you get two checks for one person? It is bad enough that someone who had low earnings can get many years of high payments because they had a high earning spouse. You should only get what you earned or a flat minimum equal to the poverty line.

That was my thought as well.. while it is true that the lower benefit goes away when a spouse dies it isn't being hosed. It's never been the deal so why would anyone expect that both checks should continue.

SS is mostly an individual thing... each person's benefit is based on what they contributed (ith an exception for low earner spouses). There is no joint life option like with a SPIA or defined benefit pensions.

 

[finnski1]

Well. She is 3 years older than I am. She plans to take her SS benefits at age 62 (in 2 years).

Since I am the higher earner, I play to delay SS benefits until age 70.

At 62 she would probably get more like $16k not the $27k you mentioned at age 70.

 

[G-Man]

At 62 she would probably get more like $16k not the $27k you mentioned at age 70.

Yep. It's actually $1750 per month.

 

[G-Man]

Don't worry about that. Semantics aside, has your question been answered?

So, at the end of the day, there is no cap that would reduce your SS benefits. If I'm entitled to $70K of SS benefits at age 70, I would receive that amount.

 

[SecondCor521]

G-Man, have you logged in to the SSA site and seen what they say your benefit will be?

That seems more directly applicable than a USA Today article and some YouTube video.

If you do look at SSA.gov, the benefits there are in today's dollars, so you should receive that amount adjusted upwards for the various applicable COLAs between now and when you claim.

(And yes, it's my understanding that if your benefit on the SSA.gov website today, increased by COLAs, happens to exceed whatever the maximum amount the USA Today article says it is, then that won't matter. USA Today's number is ignoring those future COLAs when coming up with the number, and if you already are close to the maximum number, then those COLAs could push you beyond today's number.)

 

[G-Man]

G-Man, have you logged in to the SSA site and seen what they say your benefit will be?

That seems more directly applicable than a USA Today article and some YouTube video.

If you do look at SSA.gov, the benefits there are in today's dollars, so you should receive that amount adjusted upwards for the various applicable COLAs between now and when you claim.

(And yes, it's my understanding that if your benefit on the SSA.gov website today, increased by COLAs, happens to exceed whatever the maximum amount the USA Today article says it is, then that won't matter. USA Today's number is ignoring those future COLAs when coming up with the number, and if you already are close to the maximum number, then those COLAs could push you beyond today's number.)

Yes. I have an account on SSA.gov and can verify my SS benefits as of today. I assume that would be the minimum benefit I would receive. However, I have 13 years before I would start collecting.

 

[finnski1]

Yep. It's actually $1750 per month.

So she was born after 1960. At 62 she would get 70% of her FRA age (67) benefit so 1750/.7=2500/month at 67.
At 70 she would get another 24% over her FRA so $2500*1.24=3100/month or $37,200 per year. How did you arrive at $27k?

 

[Koolau]

Yes. I have an account on SSA.gov and can verify my SS benefits as of today. I assume that would be the minimum benefit I would receive. However, I have 13 years before I would start collecting.

Of course, the elephant in the room is whether, when the "lock box" runs dry, will we all take a significant hair cut on our benefits. Statutorily, it's about a 25% cut, IIRC. Of course, Congress can make up the difference by changing the SS laws. I'm sure the gummint can print more money for us Seniors.

 

[G-Man]

So she was born after 1960. At 62 she would get 70% of her FRA age (67) benefit so 1750/.7=2500/month at 67.
At 70 she would get another 24% over her FRA so $2500*1.24=3100/month or $37,200 per year. How did you arrive at $27k?

Age 62 = $1758
Age 67 = $2497
Age 70 = $3096

The Retirement Planning software (RightCapital) is predicting $27K at age 70 if she takes her SS benefit at age 62.