Then of course their are survivors and disability benefits but those are not the main thing being talked about here which will also provide some payments if you meet the criteria. Rate of return is a poor language to use to describe this though as it is meant to indemnify you against a loss of income, not provide a profit.
- The primary insurance amount, aka your monthly payment, is based on your average indexed monthly earnings. Basically SS takes the average of your earnings applies a progressive index that is calculated by actuaries each year to reflect the change in wages in the country. If you have a low income, more of your earnings will be replaced than if you have a high income. They say it is about 56% of earnings for low income workers, and about 28% for high income. So this depends upon your income and the growth of wages.
- Also, the amount you get will depend upon when you start to take benefits. You can start at the early retirement age with reduced benefits and also be subject to an earnings test that can reduce your benefit, you can wait until the full retirement age to get your whole monthly benefit, or you can delay retirement to receive higher payments later.
- Also, there are automatic cost of living adjustments to take into account inflation that is linked to the CPI.
- Finally, it will also depend upon your life span as well as others life spans and ages. Remember social security is meant to protect you against a loss of income. If you die you are obviously done getting money. If you live to be 100 you will probably get a pretty good amount of money when it is all said and done. You may also have a spouse, a child, a disabled dependent, etc that can still draw after you die. So this part is extremely variable and depends upon you, your spouses, or your dependents life span/age.