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Social Security

How much will you get from Social Security? The Social Security Administration will send you an estimate of your benefits. Visit and choose a benefit calculator to determine them on your own. It is always best to check with Social Security directly than relying on a third party sources of information when it comes to important government or tax information that may change at any time.

Here is a sample chart to give you an idea of how benefits could be assigned:

Monthly income today

Benefit (contribution to "Primary Insurance Amount" or PIA)

Example: $4,000 monthly income



$454 ($505*0.90)



$814 ($2538*0.32)

$3,043, up to $5,700


$144 ($957*0.15)




The level of benefits you receive is largely determined by when you retire. There are heavy penalties for retiring early. For example, your benefits are reduced by about 30% if you retire at age 62. The current retirement age for full benefits is 65, although the age is rising gradually to 67. For example, if you are 43 today, your “retirement” age is 66 years, 4 months.

Social Security For Spouses

Wage-earner benefits are fixed, regardless of who earns the wages and receives the benefits. But what if you are the wage earner’s spouse? What if you earn income on your own? You’re entitled to either one-half of the spouse’s benefits or your earned benefit, whichever is higher.

What if Social Security no longer exists?

While many people plan on Social Security for income during retirement, the future of their benefit levels is far from certain. To account for the possibility that they won't be sufficient, use the Your Retirement Savings Without Social Security Tool.

Defined Benefit Plans

For the most part, defined benefit plans refer to corporate pension plans. To estimate the amount of money you can expect from these plans, you will have to check with your company because each plan has its own details and variations. But there are some features that most defined benefit plans have in common

  • Most plans are designed to combine with Social Security to provide 60-70% of an employee’s pre-retirement income.

  • Rule of thumb formula to calculate benefits:

    Monthly benefit = final average monthly earnings * 1.5% * years of service

    Example: retiring after 25 years with a salary of $4000/month would provide
          $4000 * .015 * 25 = $1500/month

  • Benefits increase the longer you’ve been with a company

  • Inflation is only taken into account if you keep working. Otherwise, if you leave the job early, your “final average monthly earning” doesn’t keep up.

Defined Benefit Plans for Spouses

The defined benefit plans for spouses are even more varied than the defined benefit plans themselves, so once again you will have to investigate the specifics of your plan. However, most pension plans provide benefits to surviving spouses, although usually at lower levels than the wage earner’s original benefit.

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