Ask Mary Beth: Money Q & A |
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What's the formula?
How does the Social Security benefit formula work?
Mary Beth answers:
By replacing 59 percent of earnings for those at the bottom of the economic ladder compared to 27 percent for those at the top, the Social Security benefit formula assures that those most in need will receive proportionally more from their investment in the system. Social Security has been an effective weapon against poverty since it was created. Without it, poverty among the elderly would be four times as high as it is today.
To learn more about Social Security and benefits, visit Social Security Online, the official site of the Social Security Administration. From there, you can request a Personal Earnings and Benefit Estimate Statement, which shows how much Social Security tax you've paid into the program, estimates your future benefits, and tells you how to qualify for those benefits.
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