Why you should calculate your social security benefits

Why should you calculate your social security benefits? Will you be getting Social Security when you retire? How can you calculate to find out? Find out here on this episode. Then download your FREE Queer Money Kickstarter, a 9-step Guide to Kickstart Your Journey to Financial Independence.

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How to calculate your social security benefits 

On this Queer Money®, we’re sharing how to calculate your social security benefits to guarantee you receive them. This is step 5 in the ‘How Gays Retire Fabulously’ bonus series. Will you get Social Security benefits when you retire? For many of us, Social Security benefits will make up a sizeable portion of our income in retirement. Are you sure you’ll get it? We break down the steps you need to take to find out if you qualify and see what the Social Security Administration estimates you will get. This episode is visually intensive. If you would prefer to watch the steps we are outlining, you can do so here.

The first step is to open your SSA.gov account. To do so, go to the SSA. Gov Website. Click on “Sign In/Up”. On the homepage, locate and click the “Sign In/Up” button, usually at the top right corner. Select “Create an Account”. You’ll be redirected to a login page. Select the option “Create an Account.” Submit your email address.  Confirm your email address. Create a password. Go through the setup process. Choose the Sign-In Method. The SSA provides two sign-in options: Login.gov, a secure government login service. Or ID.me, a trusted identity verification service. 

Choose one of the options and follow the prompts to create your account. Provide Personal Information. You’ll need to provide basic personal details such as your Name, Social Security Number, Date of birth, Address, and Email address. You’ll need to verify your identity by answering personal security questions or, depending on your chosen method, uploading a photo of your ID (driver’s license, passport, etc.). Create a Username and Password. Once your identity is verified, you’ll be prompted to create a username and password. Make sure to choose a strong password that you’ll remember. Set Up Two-Factor Authentication (2FA). For added security, SSA.gov requires two-factor authentication. You can receive a code via text message, email, or an authentication app. Review Terms and Conditions. Read through and accept the terms and conditions to finalize your account setup. Access Your Account. After creating your account, you can log in anytime to check your Social Security benefits, earnings record, and other personal information.

Then, you will want to access your Social Security Statement. Once logged in, navigate to your “Social Security Statement” or “Earnings Record.” This section provides a detailed breakdown of your earnings history and credits earned. On your statement, the top left will say whether you’ve earned enough credits. Disability benefits, Survivor benefits, Medicare Benefits, and taxed earnings for SS and Medicare. Then, confirm that you’re on track to have 40 credits with Social Security by the time you retire.

Review Your Earnings Record. Check your earnings for each year. Social Security credits are based on your yearly earnings. In 2024, you earn one credit for every $1,730 in earnings, up to a maximum of 4 credits per year. I would need $6,920 in total for 2024 to earn the maximum number of credits, $1,810 for 2025 and a total of $7,240 for 2025 for all 4 credits. Your statement will show how many credits you’ve earned so far.

Calculate the Total Credits Earned. Social Security requires 40 credits (equivalent to 10 years of work) for you to qualify for retirement benefits. Review the total number of credits you’ve earned as shown on your statement. Estimate Future Earnings. Contact Social Security (if needed). Review target Social Security benefits for various ages – 62 – 70. In the statement, you will find your estimated monthly benefits at three different ages: Age 62, the earliest you can start claiming retirement benefits, but your benefits will be reduced since you are taking them before full retirement age. Full Retirement Age (FRA). This age depends on your birth year (for most, it is around 66 to 67 years old). You will receive 100% of your benefits if you start at FRA. If you delay benefits until age 70, you will receive the highest possible monthly amount due to the delayed retirement credits.

Compare the amounts shown at ages 62, FRA, and 70. Use these figures to determine how much more (or less) you’ll receive depending on when you decide to start taking benefits. Use the SSA Retirement Calculator. If you want a more detailed analysis or a custom estimate, you can use the SSA Retirement Calculator available on the Social Security website. This tool allows you to input different retirement ages to see how it will affect your monthly benefits.

Then, you will want to determine how Social Security will affect your basic, happy, and fab retirement. Evaluate your future financial situation. What are your current financial needs? If you need the income at age 62 to cover essential living expenses, claiming early may be necessary despite the reduction. What are other income sources? If you have other income sources (retirement savings, pensions, investments), you may be able to delay Social Security to increase your future monthly benefits. Longevity Considerations. The longer you expect to live, the more it might make sense to delay claiming benefits to maximize your monthly amount. If your family has a history of longevity, waiting until age 70 could provide a better long-term benefit.

That’s Step 5: Ensure you’re on track for a full Social Security payout. Your homework assignment is to set up a Social Security dot gov account and run the numbers and calculations for yourself.

For the resources and to connect with our guests, get the show notes at: https://queermoneypodcast.com/subscribe. 

 

 

Previous Bonus Podcast Episodes

• 10 Best States for Gay People
• Step 4 – 7 Fabulous Gay Retirement Living Arrangements
• Step 3 – How to Fund Your Fabulous Gay Retirement
• Step 2 – How Much You Need to Retire Fabulously
• Step 1 – Here’s What Your Fabulous Gay Retirement Looks Like
  

 

Click below to listen to this bonus episode.