Navigating the realm of Social Security benefits uncovers a tapestry of varied compensation for men and women alike. The common thread, however, is that the average monthly benefit surpasses the $1,400 mark.
In the most recent year, the typical individual who enrolled in Social Security received a sum of $1,413.08 per month as their well-earned benefit. But let’s delve deeper into this financial landscape; the precise benefits experienced by individuals can take different forms, with personal work history playing a pivotal role. Strategic planning can lead to receiving significantly more than this average.
The Unrefined Statistics: Diverse Social Security Benefits and Decoding the Numbers
Within the 12-month span culminating in June 2017, an impressive tally of over 2.9 million Americans embarked on the journey of securing their Social Security benefits. On average, these seasoned retirees were granted a monthly benefit of $1,413.08. Yet, distinctions in benefits paid out reveal gender-based variations that are far from inconsequential.
In this specific period, approximately 1.4 million women pursued Social Security benefits, with their average allocation amounting to $1,231.50. In contrast, men received an average of $1,583.77.
Unearthing Factors: Equality, Formulas, and Choices
Within the realm of gender wage inequality, a layer of complexity adds to the variance in average payments for women. But beyond this, the very formula of Social Security brings into play a unique element that impacts individuals who dedicate time to raising children. The system calculates benefits based on the highest-earning years, spanning 35 years. However, for those with less than 35 years of work history, zero income years are factored in.
Amplify your benefits: Strategic moves for higher Social Security payout
Undeniably, one surefire strategy to bolster your Social Security benefits is seeking a salary raise within your professional domain. For individuals with less than 35 years of employment history, higher-income years can counterbalance years with zero earnings. A similar principle applies for those with over 35 years of work history, as high-income years can replace low-income ones in benefit calculations.
Should a raise not be a feasible option, strategizing for a later retirement serves as another channel for enhancing benefits. This approach minimizes zero-income years in the calculation and offers the added advantage of delayed retirement credits. These credits materialize when individuals choose to postpone claiming benefits until they reach full retirement age, allowing them to access 100% of their benefit amount.
Timing is everything: the age factor in retirement
Eager to claim your Social Security benefits? Remember, timing plays a pivotal role. While eligibility starts at age 62, opting for early claim results in reduced benefits. For those born in 1960 or later, full retirement age sets in at 67. Holding off on claiming benefits brings high-income-earning years into the equation, leading to an 8% increase in benefits per year of delay, up until age 70, thanks to delayed retirement credits.
Leverage in Diversity: Former Spouses and Spousal Benefits
Divorce introduces another dimension to Social Security benefits. Depending on your circumstances, you could potentially secure benefits based on your former spouse’s work history. This entails earning up to 50% of your ex-spouse’s full retirement amount, without impacting their payments. Similarly, if your spouse has a modest work history, opting to tap into your work record can be a beneficial financial choice.