Whether you are a millionaire or know someone else who is, you may be wondering if someone with that amount of money can get Social Security.
Well, the good news is that it’s possible. As long as you earned the income, then you are eligible for Social Security. Maybe you don’t really need that amount of cash, but you’re still qualifying for it, which can be great regardless.
Do all millionaires qualify, though? And on top of that, how much does a millionaire get as Social Security? Find out in this post.
Do Millionaires Qualify for Social Security?
Millionaires can get qualified for Social Security when they retire. Most working Americans are eligible for one, and this includes even millionaires. In fact, some of the richest people in America are getting Social Security every month, so things are looking favorable if you’re also a millionaire looking for this benefit.
However, it is important to note that Social Security benefits are capped. As such, it is not possible to receive more than the middle-class Americans, so don’t expect some huge sums of money only because you’re a millionaire.
Why Some Millionaires Don’t Qualify
Although it is possible to receive a Social Security check monthly, some people will not be eligible for it. Basically, Social Security is offered based on the income you earn from your job. But many millionaire Americans don’t earn their cash from their job alone. In fact, they have a lot of passive business activities that bring them money. Conversely, some earn from dividend income on their investments. This doesn’t count for Social Security. Keep in mind that only your wages from the job will be taken into consideration.
There are also some requirements to remember if you’re expecting Social Security benefits. First of all, you will need at least 40 quarters, respectively 10 years of earned income from the occupation. Secondly, you must have gotten the maximum amount of income for at least 35 years if you want to get the biggest Social Security benefits. Otherwise, you may not qualify for the maximum amount you could get as Social Security.
Having said that, if you had investment income as your only source of money, then you may not be eligible for Social Security. Make sure that you earned your money from job wages before you think of getting a Social Security benefit.
What Is the Maximum Amount You Can Get with Social Security?
If you want to get Social Security benefits, then you may want to take a look at how much you can receive. What is the maximum benefit you can get with Social Security?
Well, if you qualify, then you should remember from the previous paragraphs that retirement benefits are based on 35 years of earnings from your job. This is how they are calculated. What will be taken into consideration will be the 35 years of your career when you were able to earn the highest amount of money.
The average earnings of these years will be divided by 12. This will end up producing your “average indexed monthly earnings”. A formula is being created afterward, where the AIME is being added to find out your primary insurance amount. That is going to be the amount of cash you will receive when reaching the full age of retirement.
The amount you are going to receive will depend on when you file for retirement benefits. Someone who files at 62 has a maximum benefit of $2,265, whereas someone who files at full retirement age can get $3,011. Conversely, people who file at 70 years old will receive $3,790.
Should Millionaires Apply for Social Security Benefits?
Millionaires have the right to apply for Social Security benefits just as much as anyone else. However, whereas the maximum benefit may be a huge help for the average worker, it may not make such a big difference for a millionaire.
There’s also the issue of Social Security not being in its best shape at the moment. Therefore, if nothing will be done to help this situation, the reserves of the program may be depleted by 2034, which will not be beneficial at all.
If measures are being taken, such as eliminating or reducing the benefits for people who don’t need retirement money, it could help. Many millionaires receive about $1.4 billion from Social Security during an entire year. With over 47,500 millionaires being part of the program, it is obvious where a lot of the cash is going.
Even if you are a millionaire, you will be able to qualify for Social Security as long as you meet the requirements. It may not make a big difference considering how wealthy you are but if you think the money could be used for more honourable causes, you can apply for benefits.