Q & A
Why is my Social Security benefit so low?
Complete Question: I will be 66 in a few months, but I went ahead and filed for Social Security. I figured my benefit wouldn’t be reduced very much by filing only a few months early, plus I retired from my job so I needed the income. But I was shocked to find out how low my benefit actually is. People told me that your benefits are based on your highest 10 years of earnings. For me, those 10 years were pretty good. Even though I was a stay-at-home mom for a large portion of my working years, the years I did work I made between $60,000 and $90,000. Based on that, I expected a decent Social Security benefit. So why is it so much lower than I expected? Did a few months of filing early cause that much of a reduction? Should I contact them and find out if there was some mistake? I already know I don’t qualify for a spousal benefit because I’m divorced and wasn’t married long enough for ex-spouse benefits.
Answer: Even though I do not know your actual benefit amount, based on what you described it sounds like your benefit may actually be correct. Your benefit amount is not determined based on your highest 10 years of earnings – it is actually based on your highest 35 years of earnings. You may have heard 10 years because that is the amount of time you need to qualify for benefits. So let’s say over your lifetime you worked 20 years. For 10 of those years, you earned $60,000-$90,000. For the other 10 years you earned much less. The Social Security Administration (SSA) determines your benefit amount using your highest 35 years of earnings, so what about the other 15 years? The SSA will use the $0 you earned and average that in to determine your monthly benefit. Based on your situation where you were a stay-at-home mom for a long time, I would assume you have many years of $0 averaged in and/or low income due to part-time work.
If you want to make sure all of your earnings have been taken into account, look at your earnings statement from the SSA which shows you every year that you paid Social Security taxes and how much you paid. If you do not already have a copy, you can access your earnings statement on www.ssa.gov by creating a mySocialSecurity account. If you notice any discrepancies on the statement, notify SSA so they can update your information and adjust your benefit accordingly. Keep in mind, though, that your 2014 earnings may not have shown up on your statement yet. Every year the SSA automatically recalculates everyone’s benefits to adjust them for the prior years’ earnings; however, it may take a few months for the adjustment to go into effect while the earnings are reported and processed during tax season.
As for the reduction for filing a few months early: Every month does make a difference; however, it is less than 1% per month. For example, if you were supposed to get $1,000 at age 66 and you filed 3 months early, your benefit amount would be $983.30. So no, it would not have made a huge difference in this case. It sounds like your low benefit amount is due to your average earnings and not because of filing early.
C.J. Miles, MSA, MBAHCM
Research Analyst & Certified Social Security Advisor
AMAC Foundation
Notice: Any information in this posting that may be construed as an opinion is solely that of the author and not necessarily that of AMAC Foundation or its affiliates. If you have any additional questions about your benefit or any other Social Security issue you can reply below. When replying to this website please do not provide any personal identification information such as Social Security numbers. If you would like to discuss your situation privately, you can email C.J. Miles at cmiles@amacfoundation.com.
I have a question my social security check OS $ $1,074 a month bring home why is it so low
Diane:
Your Social Security benefit is the result of several factors, including your work history and your age at the time you started your benefits. Social Security uses the highest 35 years of inflation-adjusted earnings on which you paid FICA tax as the basis for computing your benefit and then adjusts it based on your age at filing (reduction if before full retirement age, addition between full retirement age and age 70). That’s the basic formula. Since we don’t know your personal details, and since we are not affiliated with the Social Security Administration (SSA), we can’t explain the difference between your benefit amount and the statistical averages. You’ll need to direct this question to your local SSA office.
Gerry Hafer
AMAC Foundation, Inc.
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I don’t get a lot because I didn’t work a lot of years because of my disabilities. I am now fully disabled. But I did work over 10 years. Why do people getting SSI have larger checks than I do?
Letter carrier with average 40-45,000 per year worked 30 years.
Social Security Benefits
121.00 minus Medicare 105.00
Total benefit per month = $16.00
Yes that is sixteen dollars a month I get!
By the way now age 70 and applied at 67
Glenn,
If you would like assistance understanding your benefits better, please provide us with more information from which we can evaluate your situation. Your benefit amount does seem exceptionally low, so I’m assuming there is some set of unique circumstances which account for that. For example, during your time at USPS were you part of the CSRS or FERS retirement plan? One entitles you to Social Security benefits and the other does not. Did you have other non-government employment over your lifetime from which you are getting SS benefits? Are you affected by the “Windfall Elimination Provision” (WEP) of the Social Security Act? Have you set up a MySocialSecurity account at SSA.GOV and gotten a complete record of your earnings over your lifetime? Please feel free to email us (info@amacfoundation.com) with this additional information, or call us at 1-888-750-2622 to speak to one of our Certified Social Security Advisors for further assistance. Note that this is a free service of The AMAC Foundation.
Russell Gloor
Certified Social Security Advisor
The AMAC Foundation
rgloor@amac.us
Letter carrier with average 40-45,000 per year worked 30 years.
Social Security Benefits
121.00 minus Medicare 105.00
Total benefit per month = $16.00
Yes that is sixteen dollars a month I get!