Progressive Benefits. Retirement benefits are based on an individual’s wages. In 2010, the median Social Security retirement benefit for an individual was about $14,000. But high-wage workers could get nearly $ 30,000 and low-wage workers as little as $80,000 a year.
Although high-wage workers receive larger benefit checks than low-wage workers, the ratio of benefits to prior wages isn’t constant. Instead the Social Security benefits formula is progressive because the ratio of benefits to prior wages declines as wages increase. Social Security replaces 90 % of the first $749 of prior average monthly earnings but only 15 % of monthly wages above $4,517 (see Table 34.2). The declining wage replacement rate ensures that low-wage workers receive proportionately greater benefits