Here's How Social Security Benefits Are Calculated

By Markets Fool.com

Continue Reading Below

Social Security benefits have become an increasingly important part of many Americans' retirement strategies. Yet few people actually know how their benefits are calculated.

In December alone, an estimated 38 million people received nearly $50 billion in retirement benefits, equating to an average of $1,294 per month. Should your monthly check be bigger than this? And, if so, why or why not?

As I explain in the slideshow below, the size of your benefits is primarily a function of how much you earned over the course of your working life. The more you earned, the higher your benefits will be.

Of course, there's more to the analysis than this. But at the end of the day, as you'll see by scrolling through the short presentation below, it doesn't take a mathematician to fully grasp the ins and outs of the Social Security benefit formula.

The article Here's How Social Security Benefits Are Calculated originally appeared on Fool.com.

Continue Reading Below

For more information like this, follow John on Twitter by clicking here. While John is still three decades away from retirement, he's already counting down the days. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.