Millions of Americans earn modest wages throughout their careers, sometimes never making more than $40,000 a year.
They still pay into Social Security with every paycheck and expect those contributions to turn into a monthly retirement benefit.
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But how much does a lifetime at that income level actually translate into once the checks start arriving? Here’s how much Social Security you’d get if you never earned more than $40,000.
Social Security benefits are tied to how much a worker earned over time.
The Social Security Administration (SSA) looks at a person’s 35 highest-earning years when calculating retirement benefits. Those wages are adjusted for inflation and averaged into a monthly figure. That number is then used in the formula that determines a retirement check.
Workers who spent their careers earning less, including those who never made more than $40,000 a year, generally receive smaller monthly benefits.
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Someone who spent their career earning about $40,000 a year could receive roughly $1,300 to $1,400 per month in Social Security at full retirement age, based on estimates from the SSA benefit calculator using a sample worker born in 1960.
The exact amount depends on when benefits begin. Claiming at age 62 results in a smaller monthly payment. Waiting until full retirement age, which is 67 for someone born in 1960, produces a larger check. Delaying benefits until age 70 increases the monthly amount even more.
A Social Security check of $1,300 to $1,800 a month equals about $15,600 to $21,600 a year. For many retirees, that amount may cover basic expenses such as housing, groceries and utilities, especially in lower-cost areas.
However, it may not stretch as far in cities with higher rents or health care costs. According to the SSA, Social Security is designed to replace 40% of a worker’s income in retirement, which means many retirees rely on savings, pensions or other income sources, as well.
Retirees need about 70% to 80% of their pre-retirement income to maintain a similar lifestyle after leaving the workforce, certified financial planner Ryan Johnson wrote for Ameriprise Financial.
For someone who earned $40,000 a year, that could mean needing roughly $28,000 to $32,000 a year in retirement income.
