What will be the average Social Security benefit in 15 years?

Most retirees have Social Security benefits in mind for the future. If retirement is still a long way off, you may be wondering what the average Social Security benefit will be like in 15 years, when you’re ready or almost ready to retire.

According to Martha Shedden, CFP and president and co-founder of the National Association of Registered Social Security Analysts, figuring this out requires a little more than simple math.

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Shedden claims the average monthly Social Security income at this time is about $1,900. No one can accurately predict whether the state of the economy or inflation will hold steady in 15 years, but with the help of computer programs they can make reasonable predictions.

According to Shedden, “If you assume a 2.25% inflation rate, the average benefit over 15 years would be about $2,663.” “However, the average benefit amount over 15 years would be closer to $2,802 due to historical cost-of-living adjustments (COLAs) over the past 20 years of 2.6%.”

Shedden commented that, in reality, in fifteen years the recipient will feel like they are spending $1,907 on it now.

Don’t Underestimate Your Benefits

Although one might assume that individuals overestimate their benefits, Shedden said people often underestimate the amount of Social Security they are entitled to. When she and her partner realized that together they could make about $90,000 a year, they were surprised.

According to Sheedan, “some of the highest-earning couples who have earned the most annually have combined lifetime totals in the millions.”

The Point of Social Security

However, the point of Social Security isn’t to bring in millions, Shedden said. It was set up as a program to keep people out of poverty.

For folks with lower incomes, it’s often a greater percentage of their total retirement assets, sometimes between 50% and 90% of what they will retire on.

Shedden says people with low incomes should be informed and aware of how much it will cost. “Because that amount will increase every month and every year so they can postpone the collection.”

For the rest of their lives, the higher amount is subject to cost-of-living adjustments.

Supplemental Security Income is available to those below the poverty level (SSI).

Although Shedden admitted it wasn’t huge, he claimed it was an important part of many Americans’ retirements.

Prepare for Social Security Reductions

But there is much uncertainty about the future of Social Security. “Considering the Social Security Administration’s projections that benefits would need to be cut by 23% around 2033 to keep the program stable without legislative intervention,” says Brian Kuhn, CFP and senior vice president of the Wealth Enhancement Group, “the average benefit would drop to about $2,182.”

It is important to remember that not everyone gets the same benefits and these are just averages. Additionally, it’s important to take all reasonable steps to avoid relying solely on Social Security during your retirement.

Start Retirement Planning Early

“It’s never too early to start planning for retirement,” Shedden said. “The importance of starting a savings habit early and watching it grow cannot be overemphasized.”

Better to give yourself as many chances as possible.

“Social Security is only a portion of retirement income and was never intended to replace 100% of pre-retirement earnings,” Shedden noted.

Pay Yourself First

If you plan to retire in your 40s or younger, save as much as you can by “paying yourself first,” Shedden said. “Designate a certain portion of each paycheck to a savings or investment account.”

Get That Free Money

Also, always take advantage of employer-based retirement accounts to receive the “free” employer match and the extended years of compounding on these investments, said Shedden.     

For Later Planners

Shedden advises those hoping to retire at age 50 and beyond to start saving, building up a nest egg and starting a comprehensive financial plan. Be careful to consider what other stable, reliable sources of income you will have besides Social Security to support the lifestyle you have in mind.

Regardless of what you get from Social Security in 15 years or more, you can retire comfortably with these solutions.

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