How Much Will My Social Security Benefits Be? Sonoma County Wealth Advisor Explains

How Much Will My Social Security Benefits Be? Sonoma County Wealth Advisor Explains

As a Sonoma County wealth advisor for more than 30 years, it’s safe to say I’ve helped hundreds of families with their retirement and financial planning needs. While every situation is different, I do hear a lot of the same concerns, many of which surround Social Security.

For most people, Social Security retirement benefits aren’t extravagant – the average monthly payment is about $1,500 per month – yet they still form part of most people’s retirement plans. The most common question we’re asked about Social Security benefits is, “How much will I get?”

The answer depends on your Full Retirement Age (FRA).

What is My FRA?

The Social Security Administration (SSA) will send you paper or online statements that project what your future benefits will be, based on your work history, your eligibility and your age, but this number is based on you taking your benefits at your FRA, which is determined by the year you were born. For example, if you were born between 1943 and 1954, your FRA is 66. This age increases gradually if you were born in 1955 or later until it reaches 67. Use this simple chart to find your FRA:

Based on this “magic age,” there are three different scenarios to determining how much you will receive.

While the information below will help you establish how much you will receive in Social Security benefits, it’s still wise to discuss your retirement and financial planning goals with a financial advisor before claiming your benefits, because the decision of when to claim these benefits should be based on more than just the number. You’ll need to consider factors such as your spouse’s benefits, your family situation, any other income you’ll receive in retirement, your tax situation, and your health and expected longevity, to name a few. This seemingly simple decision can impact your retirement and financial planning strategy, not only for you but for your family too.


Have a question about your retirement? Contact Montgomery Taylor Wealth Management to see how we can help.


Retiring Before Your FRA

Anyone who is eligible for Social Security benefits is able to start claiming them as early as age 62. However, if you take them right away, your benefits will be reduced. In 2020, that reduction would be about 28 percent of what you would get if you waited until your FRA.

Also remember that the amount you receive is based on the years you work, so if you stop working early, this can also affect the amount you will receive.

There are many reasons why you may retire early, either by choice or because of outside factors such as a loss of work, health concerns or other family issues. A study performed by the Employee Benefit Research Institute found that 26 percent of American workers who thought they could work until age 70, couldn’t. It’s important to discuss this possibility with your financial advisor, because, as 2020 has taught us all, life doesn’t always go as planned, and you may need Social Security income earlier than expected.

Here’s what taking your Social Security benefits early could look like:

If “Mary,” a school teacher who will turn 62 this year, was expected to receive $1,000 a month in Social Security benefits at her FRA, she’d receive $750 if she decided to retire by year’s end. This reduction is permanent, and she will receive this amount through the end of her life.

Retiring At Your FRA

If you’re able to hold off on claiming your Social Security benefits until your FRA, the amount you will get is pretty straight-forward. If you’re eligible for $1,000 in benefits, you’ll receive $1,000 in benefits.

This may feel like the simplest decision, but again, making a decision can affect not just you but your family members as well. Some couples I work with decide to stagger their benefits, so they can receive one spouse’s now while another’s continues to grow.

It’s important to know what your monthly Social Security income will be at FRA. Regular statements can help you check your account to see that the SSA has accurately kept track of your yearly earnings and the Social Security taxes you have paid.

Retiring After Your FRA

If you’re able to continue working after your FRA, the amount you receive in Social Security benefits will increase in two ways:

  1. Every additional year you work adds another year of earnings to your Social Security record. Higher lifetime earnings often equates to higher benefits when you retire.
  2. Every year you wait to take your benefits after your FRA, the amount you will receive will increase up to 8 percent until you reach age 70, in which any increases will stop.

Here’s what this could look like:

If “Mary” from the above example waited to retire until age 70, she could receive $1,267 a month opposed to $1,000 at FRA or $750 at age 62.

It’s easy to assume that the better decision is to wait as long as possible to start claiming your benefits, but the decision should be based on your health, life expectancy and the needs of your family members. Divorcees, widows and, in some cases, beneficiaries may also be eligible for these benefits.

For more on Social Security benefits and how other factors can affect your decision about when to start claiming these benefits, download our complimentary eBook below, or contact us to schedule a one-on-one, no-strings-attached conversation. Montgomery Taylor Wealth Management is a Santa Rosa-based firm serving the greater Sonoma County area. Our team of financial advisors, certified public accountants and estate planning attorneys provide you with integrated, complete financial advice so you can simplify your life and maximize your opportunities.

Your financial future is too important to leave to chance!


Montgomery Taylor - Understanding Social Security benefits