Fortune tellers use crystal balls, tea leaves, and tarot cards to see the future. Thankfully, you don't have to resort to psychic tools and mystical arts to predict your Social Security benefit. The Social Security Administration (SSA) opts for a more concrete approach, in the form of online calculators and other estimators.
In 2020, the average Social Security benefit is $1,503 monthly and the maximum benefit is $3,790. A six-figure salary translates into a benefit that's between those two numbers -- but where the benefit lands, exactly, is influenced by other factors beyond your current income. Your income in prior years, your age today, and the timing of your benefits claim are also important. If you're willing to make some assumptions, it is possible to estimate your future monthly Social Security benefit.
To get a quick-and-dirty estimation, you could multiply your salary by 30% to 35%. Here's the logic. For workers with an average salary who claim their benefit at Full Retirement Age (FRA), Social Security usually replaces about 40% of working income. That percentage goes down for workers who earn an above-average paycheck and up for those who earn less than average.
Your salary at $100,000 is about double the national average, which means Social Security will replace something less than 40% of your income. Exactly how much less is hard to know without more information. That's why it's appropriate to use a range in this quick-and-dirty estimate -- guessing with a single percentage won't be accurate. Hence, 30% to 35% is a conservative starting point. Apply those percentages to your $100,000 salary to estimate a Social Security benefit of $30,000 to $35,000 annually, or $2,500 to $2,917 monthly.
Note that FRA is the age at which you qualify for your full Social Security benefit. It's based on your birth year, but for today's prospective retirees, FRA is always between the ages of 66 and 67. When you claim Social Security before FRA, your benefit is lower. Claim after FRA and your benefit increases. The 40% guideline is only applicable for claims filed at FRA.
Social Security Quick Calculator
You can get a more accurate prediction if you're willing to input a few pieces of information to the Social Security Quick Calculator. All you need is your birthdate, current salary, and future retirement date. You can view your benefits estimate in today's dollars or future dollars, adjusted for inflation. There is a place to add your projected retirement date, but you can leave that field blank to see benefits estimates for claiming at age 62, at Full Retirement Age (FRA), or at age 70.
The table below shows some results from the Quick Calculator, assuming a $100,000 salary.
Estimated Benefit at 62 and 1 Month
Estimated Benefit at FRA
Estimated Benefit at Age 70
As you can see, a younger person today making $100,000 earns the highest benefit. The calculator assumes your earnings gradually rise 2% annually to reach $100,000 in the current year, and then remain at $100,000 until you retire. In that model, someone who is 35 and earning $100,000 today will make that six-figure salary for 29 years. But the person who is 60 and just reached the $100,000 salary mark only has four more years to earn that amount. Even the inflation indexing that Social Security does with past-year wages isn't enough to overcome the assumptions that the calculator makes. The 60-year-old has a lower income average over time and, therefore, earns a lower Social Security benefit.
If the Quick Calculator's historic income estimates don't reflect your situation, you can update them two ways. You can change the annual growth assumption of 2% to a different rate, or you can input your income history manually by year.
You can also try the SSA's Retirement Estimator. This calculator uses the earnings history that's tied to your Social Security number to give you a more accurate prediction. You'd provide your name, Social Security number, birthdate, and a few other defining details, along with last year's net earnings. As with the Quick Calculator, the Retirement Estimator returns three estimates of your monthly benefit, based on when you file for Social Security: at age 62, at FRA, and at age 70.
My Social Security website
If you'd like to access your estimates again without inputting the data, create an account at my Social Security. After your account is set up, you can log in anytime to see your benefits estimates and review your earnings record for accuracy.
Earn more, make more
If these estimates don't deliver numbers you like -- and they often don't -- you have two ways to add to your retirement income. First, increase your retirement contributions now, so your income from savings can pick up some slack. And second, increase your income. Using the Quick Calculator, you can see that a 35-year-old's monthly benefit increases from $2,780 at FRA to $3,028 when you change the current income from $100,000 to $120,000. Ask for a raise, throw your hat in the ring for a promotion, or start up a side hustle. Your hard work will pay off when you can retire with an extra few hundred dollars coming in every month.
The $16,728 Social Security bonus most retirees completely overlook
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