Role of Social Security Benefits
While Social Security isn’t designed to be a person’s entire retirement income, it is designed to replace between 27% and 41% of a person’s income before retirement. Here’s a small sample of how Social Security is designed to replace a person’s pre-retirement income. You’ll notice it’s designed so lower-income folks receive a larger percentage of their income.
It’s very important to note that folks earning more than the Social Security cap limit of $118,500 stop paying Social Security tax on their earnings above that limit, but keep in mind their Social Security payment is maxed out at $2,642 as of 2018.