How Much Social Security Will You Get If You Make $25,000 A Year?

Setting yourself up for retirement is a marathon, not a sprint, though it might feel like a race to the finish line the closer you get to clocking out of the workplace for good. Are you ready to not only enjoy a life post-career, but set up financially to make ends meet and know everything about your Social Security benefits? Those can be a tough question for any retiree, especially if your wages have not kept up over the years.

If you are currently making $25,000 annually you might be extra curious to know exactly how much Social Security you are entitled to. Investopedia broke down the steps for adding up benefits over one's lifetime and boiled it down to the fact that you need 40 credits to qualify for retirement benefits, which comes out to 10 years of work in the eyes of the Social Security Administration. Retirees receive one credit per each $1,730 of earnings that is capped at four credits each year, paying out $1,976 a month in Social Security benefits as of 2025.

Are you ready to do some math? If you are only making $25,000 each year, it is time to break out the calculators, get some scratch paper, and figure out how your Social Security benefits stack up.

The United States spends trillions of dollars on Social Security every year to make sure beneficiaries are paid what they are owed in entitlements. Despite changes to the Social Security system this year, Americans who pay into the program over the course of their careers are able to project what their earnings will look like come retirement using the Social Security Administrations' (SSA) quick calculator.

For example, say you are turning 62 this year, which is the earliest possible age for someone to start receiving benefits, and planning on retiring at the end of 2025. In this scenario, you are consistently earning an yearly sum of $25,000 in wages and have been for some time. The SSA can crunch the numbers to show that your estimated monthly benefit amount would be $822.00, with no future earnings or price hikes factored into the equation.

Does that number make you feel better or worse about the prospects of retiring? If you are uneasy with how the numbers are shaking out, don't worry, because there is plenty you can do to ensure your finances are in order for retirement.

By today's standards, an annual take home of $25,000 is not a lot of money. Even so, living paycheck to paycheck still provides opportunities to save money, which is the name of the game come retirement, but not the sole solution to making ends meet. 

If you are worried that your Social Security benefits will not be able to cover your cost of living expenses, you might want to think about delaying your retirement and staying in the workforce for a few more years. You might also want to consult with a financial planner to chart out how much you should really be saving for retirement between employer provided plans like a 401(k) or via tax-advantaged investment accounts such as Roth IRAs.

You can also start to investigate how to downsize your lifestyle, including selling your home, cutting back on luxuries, and sticking to a budget that covers your needs, while still allowing for some flexibility to do what you want in retirement.