Maximum Social Security Benefit

The maximum Social Security Benefit at normal retirement age is $2,687 per month in 2017 and rises to $3,538 if you wait until 70 to collect.  If you retire at the earliest possible date of 62, it goes down to 2,153. However, the average Social Security benefit actually paid is only  $1,360.

To Receive a Social Security Benefit

In order to qualify to receive a Social Security benefit you must work and pay into the Social Security System for 10 years and the benefit increases for each year you work and contribute to the system for 35 years.

Calculation of the Social Security Benefit

If you qualify, Social Security calculates your maximum benefit using a complex formula.

Generally, your Social Security Benefits are: 90% of the first $531 of average monthly wages; 32% of the next $2,671; and 15% of anything above that.

Spousal Social Security Benefit

If it is just you, the Social Security decision is merely based on your own financial and personal situation.

However, if you have a spouse, you need to understand and consider how Social Security will work for the both of you.  This is especially important if your wife either didn’t work, or made a lot less than you.

If your spouse has not worked or her benefit would be less than yours, she may be able to receive up to one-half of the amount you are receiving.  She will receive the higher of her own benefits or the spousal benefits.

If you are divorced and your marriage lasted at least 10 years, you may be able to get benefits based on your spouse’s Social Security.

If your spouse is deceased, and your marriage was for 10 years,  you can claim benefits as early as 60 (50 if disabled) with full benefits at full retirement age.  At full retirement age, you would get 100% of your deceased spouse’s benefit.  You would receive a lower percentage if you collect prior to full retirement age.

 The spousal benefit does not increase after full retirement age so it is always smartest to claim it on or before full retirement age.

 GPO and WEP Reductions

If you receive a pension or disability from a state or local government where you did not pay into the Social Security System, some or all of your benefit may be reduced through the Government Pension Offset or the Windfall Elimination Provision.