Under the Retirement portal of www.socialsecurity.gov is a banner called “Calculate Your Benefits.” There, you can use the calculators to estimate your potential benefit amounts using different retirement dates and levels of future earnings. The calculators display rough estimates of retirement, disability and survivor benefit amountsif you or a loved one becomes disabled or when you or a loved one dies.
Many people think Social Security benefits are piled away to dole out for future earnings. Not true. Benefits that are taken from a paycheck today, are also paid out in form of a benefit today. In most cases, Social Security benefits are calculated based on age, income guidelines, the nature of a disability, if one can find financially gainful work or the length of one’s work record.
Social Security, or FICA, tax, everyone pays into, including the self employed, freelancers and those working while they’re still receiving Social Security. All of these are factored into your ultimate benefit amount, but, since the calculators are based on estimates, how much exactly falls into when the retirement age takes place, the person’s age, when and if their spouse dies or if and when a disabled child becomes and adult and leaves home.
Conversely, not all jobs and benefit calculations are created equal. If you work for an agency of a state or local government, say the United States Post Office, if you are a state licensed C.S.W. for your state Medicaid’s office or if your are a city employee, unlike workers in the private sector, these who work for state and local governments may not be covered by Social Security. Some are covered just by their public retirement pension programs; some are covered by both public pensions and Social Security; some are covered by Social Security only. Again, this is plausibly too detailed a matter to try and have the Social Security online computations complete and you would be better served taking a trip to the nearest Social Security office.
It’s even a bit more complicated if one’s self employed and had worked for the private sector and in a government role during one’s 40 year career track. Pooling the data together can compute either a pretty nice Social Security benefit or a substantially lowered amount one would be expecting.
Either way, what lacks in a Social Security benefit could make up for it in the other retirement programs evolved form one’s employment records. Bottom line: Nothing will ever beat paying yourself first.