Ask Larry

Why Is My Benefit Amount Not Higher In Relation To My Mother's Benefit Rate?

I just wanted to know why my mother who worked for 45 years at a lower wage than I is getting $1261.00 per month, And me who worked as a Masters Degree professional at a much higher wage/ salary for the same time are to recieve only $2000.00 at age sixty five?

Hi,

Social Security is a social insurance program, not an individual retirement account. Social Security retirement benefit rates are calculated based on the highest 35 years of a person's wage-adjusted earnings. The calculation formula has 'bend points' that are designed to provide people who had relatively low annual earnings levels with benefit rates that are higher as a percentage of their average annual earnings than the percentage paid to workers with higher average earnings. The principle on which the formula is based is that workers on the lower end of the earnings spectrum will require a benefit rate closer to the full level of their pre-retirement earnings in order to meet their necessary living expenses after they are no longer able to work.

For more detailed information regarding the benefit calculation formula, refer to this Social Security pamphlet: https://www.ssa.gov/pubs/EN-05-10070.pdf.

Best, Jerry

Posted: 
Feb 19 2017 - 12:00pm
MaxiFi software running on a laptop
Get What's Yours!
Discover tens of thousands in extra retirement dollars with Maximize My Social Security software!
  • Find your maximized strategy
  • Unlimited what-ifs
  • Step-by-Step filing instructions
  • Our software's lifetime-benefit increase for an illustrative couple earning $65K each and planning to take retirement benefits at 62.

    Results will differ based on your specific case and filing strategy.

Getting Started is Easy
Web-based software. Works on ALL browsers. No download.
$40 Annual Household License
$250 Annual Financial Advisor License