Ninety-six percent of Americans participate in the Social Security retirement program, but the average recipient only receives about $1,153 a month in benefits in 2009—slightly less than minimum wage, according to the American Association of Retired Persons. Getting the maximum benefits depends on how much you make and how long you work. You can boost your benefits above the norm by delaying retirement, but it may not be enough to sustain your lifestyle.
The maximum dollar amount a person retiring at the full retire age could get in 2011 was $2,366, according to the Social Security Administration. This assumes that the worker contributed the maximum allowable amount from the age 21 to 66—the age of full retirement in 2011. Missing just a few months of work would slightly lower the maximum benefit.
The full retirement age depends on when you were born. As of 2011, people born between 1943 and 1954 have a full retirement age of 66. This steadily increases until 1960. Everyone born after 1960 has a full retirement age of 67. Also, the maximum taxable income changes over time based on inflation. In 2011, workers paid taxes on all earned income up to $106,800.
Workers can go over the "maximum" Social Security benefit by delaying retirement. Again, how much extra SS you earn depends on what time after the full retirement age you retire. In 2011, you can delay retirement until the age of 70. Every extra month you work adds a benefit dependent on your birth year. People born in 1943 or later could add a maximum of 8 percent to their benefits or two-thirds of a percent per month.
Social Security was never meant as the only income a person needs in retirement. Most people need to replace about 70 percent of their working wages in retirement to live comfortably. Social Security only provides about 40 percent of a person's retirement income needs. You should still save as much money as possible during your working years and invest it in a private pension or other securities, such as a savings account.
- American Association of Retired Persons; What's the Maximum Social Security Benefit?; Carole Fleck; July 2010
- Social Security Administration; Maximum Social Security Retirement Benefit; April 2011
- Social Security Administration: Understanding the Benefits
- Social Security Administration: Delayed Retirement Benefits
- U.S. News and World Report; The 10 Biggest Sources of Retirement Income; Emily Brandon; May 2010