Hartford, Connecticut – Income disparity is a pressing issue that persists throughout the working world, extending into the realm of Social Security retirement benefits. This government-run pension program is designed to provide financial assistance to individuals once they reach retirement age. Earnings during one’s career play a significant role in determining the amount of benefits one may receive upon retirement. As such, those in lower income brackets can expect to receive smaller Social Security benefits compared to higher earners.
To qualify for Social Security retirement benefits, individuals must have at least 10 years of work, or 40 credits, according to the Social Security Administration. The benefits are calculated based on average indexed monthly earnings from up to 35 full working years, with the highest-earning 35 years factored into the equation. Working the full 35 years can maximize one’s Social Security check, while working fewer years can result in reduced benefits.
Individuals who earned lower wages throughout their careers can expect to receive lower Social Security benefits upon retirement. As of March 2024, the average retirement benefit stood at $1,864.52 per month, with the maximum payout reaching $4,873 per month for those with high earnings over 35 years. However, the Social Security Administration does not track average benefits by income group.
A recent analysis conducted by the Center on Budget and Policy Priorities revealed that low earners retiring at age 65 typically receive an average yearly benefit of $14,824, translating to around $1,235 per month. Furthermore, there is a special minimum Social Security benefit intended to support low-income workers, requiring a minimum of 11 years of Social Security coverage to qualify.
When individuals decide to claim their Social Security benefits can also impact the amount they receive. While benefits can be claimed as early as age 62, delaying the process can result in higher monthly payments. The full benefit is received at full retirement age, with the highest possible benefit achieved at age 70.
Overall, Social Security benefits serve as a crucial financial safety net for retirees, offering support based on one’s earnings history and years of work. Understanding how these benefits are calculated and distributed is essential for individuals planning for their retirement and financial future.