Episode #60 – “Social Security Checks Are Lower Than Many Americans Expect”

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Social Security checks are less than retirees expect according to a study reported on by USA Today. (The link to the article is below).

I have a couple problems with the article first. To begin with it says “future retirees who were surveyed expect to receive $1,628 on average each month. But those surveyed who are already in retirement say they are only collecting $1,257.

“That’s a big difference,” Ambrozy says. “It’s like taking a 25% pay cut.”

There’s absolutely nothing odd at all about what a future retiree EXPECTS from Social Security and what a current retiree RECEIVES.

Two completely separate issues there. Not sure why the author didn’t get that.

Secondly, the article states that the average Social Security check is only $1,410 a month. The implication is that if that is the average check and future retirees are banking on $1,628 a month, there is a big disconnect there.

Well, you need to ascertain WHO the average recipient is receiving that check and compare that person to WHO the future retiree is.

Is the average recipient 75 years old and the future retiree 55? That’s 20 years of difference. Can’t use an average for someone who’s already been receiving Social Security for over 10 years with someone who is 10 years away from receiving it! That’s bad journalism.

But, be it as it may, I still wanted to go over how you can figure out your future benefits. Remember, everything is based on your AIME, Averaged Indexed Monthly Earnings.

Your AIME is simply your 35 highest years of income, added together and then divided by 420. Once we get that number we apply the actual bend points to get your PIA. PIA is the amount of Social Security you’ll get at your Full Retirement Age(FRA).

Seems confusing? Don’t let it get you down. Just watch the video. I show you a couple examples of how this works.

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