The Social Security Administration (SSA) will deliver another round of monthly payments for millions of Americans this month. Retired workers and Social Security Disability Insurance (SSDI) recipients received their benefits last Wednesday. Pending Social Security payments for retirement and disability payments will continue to be sent on March 20th and March 27th.
Many Social Security beneficiaries can sometimes get confused about the different payment amounts that are distributed. Monthly payments vary depending on the Social Security benefit program and because of several factors such as full retirement age (FRA), working history, type of disability, and special circumstances that make each beneficiary payment unique. Therefore, the American Association of Retired Persons (AARP) designed an online calculator that Social Security beneficiaries can use to calculate the exact amount they will receive.
AARP Social Security payments calculator
The AARP Social Security calculator is a straightforward tool that shows you how much your monthly payment will be based on when you decide to start collecting benefits. Based on the average monthly living expenses of retirees, the calculator also shows you how much of your living expenses will be covered by your Social Security income.
Additionally, the online tool shows beneficiaries how much of their daily costs can be covered by Social Security payments, as well as how much they will receive if they decide to postpone and wait to claim benefits. The AARP calculator can also show them how much their benefits will change if they continue to work after filing for retirement.
How does the AARP Social Security payments calculator work?
The monthly retirement benefit is based on your age and average earnings from jobs you have held, including self-employment, for which you paid Social Security taxes. The Social Security Administration (SSA) generally calculates your 35 highest-earning years, adjusting for historical wage growth.
You can review your earnings history at any time using an online My Social Security account. Starting at the minimum retirement age of 62, you will receive a higher monthly payment if you wait until full retirement age, which ranges from 66 to 67 depending on your birth year. But if you wait until 70, you will receive the maximum monthly benefit, which currently can reach up to $4,873.
For example, a single person born in 1961 with an average salary of $50,000 would receive $1,386 per month if they retired at age 62, which is the earliest age at which benefits can be started. A person who waits until they reach the full retirement age of 67 would receive $1,980 every month. And by delaying until age 70, he or she would receive $2,455, the maximum benefit on those earnings. Just keep in mind that if you wait to collect after the age of 70, payments will not continue to increase.
Additional resources to optimize your Social Security payments
Choosing the right time to collect Social Security benefits can significantly impact your retirement income, especially if you don’t save enough. Online tools can help beneficiaries determine when to collect their benefits, providing estimates of earnings. Some online tools available are:
- The Social Security Administration’s website: The SSA retirement estimator calculates monthly benefits based on earnings history, with increasing accuracy as people approach retirement.
- Open Social Security: This is a complex calculator created by CPA Mike Piper, which calculates yearly Social Security benefits and cumulative earnings with a spouse over retirement while taking into account factors such as a spouse, lifespan, and potential benefit cuts.
- MaxiFi Planner: This is a fee-based Social Security tool created by economist Laurence Kotlikoff to help retirees maintain a consistent standard of living. It allows users to enter details such as retirement account withdrawals, mortgage costs, and pensions.