Your payment depends on your earnings history and the age you start claiming
Social Security calculates your monthly payment based on how much you earned during your working years and which age you choose to start receiving benefits. The Social Security Administration (SSA) looks at your 35 highest-earning years, adjusts them for inflation, and uses a formula to arrive at your Primary Insurance Amount (PIA) — the payment you would receive at your full retirement age.
If you claim before full retirement age, your payment is reduced. If you delay claiming past full retirement age, your payment increases. The exact reduction or increase depends on your birth year. Your full retirement age ranges from 66 to 67, depending on when you were born.
You can see an estimate of your payment by creating an account on ssa.gov and viewing your Social Security Statement. This statement shows your earnings record and provides payment estimates at different claiming ages. The estimate accounts for your actual work history, so it is more accurate than a general calculator.
Key Takeaways
- Your payment is based on your 35 highest-earning years, adjusted for inflation, with years below that counting as zeros.
- Full retirement age is 66 or 67 depending on your birth year, and claiming before or after that age changes your monthly amount.
- You can view your personalized payment estimate on ssa.gov by logging into your Social Security account.
- The reduction for claiming at 62 is roughly 30 percent lower than at full retirement age; the increase for waiting until 70 is roughly 24 to 32 percent higher.
How the SSA calculates your Primary Insurance Amount
The Social Security Administration uses a three-step process. First, it identifies your 35 highest-earning years and adjusts each year's earnings for inflation using a national wage index. If you worked fewer than 35 years, the missing years count as zero, which lowers your average.
Second, the SSA divides your total adjusted earnings by the number of months you worked (420 months for 35 years) to get your Average Indexed Monthly Earnings (AIME).
Third, it applies a formula called the Primary Insurance Amount bend points to your AIME. This formula is progressive: it replaces a higher percentage of lower earnings and a lower percentage of higher earnings. The exact bend points change each year and depend on the national wage index. For 2024, the formula roughly replaces 90 percent of the first portion of your AIME, 32 percent of the middle portion, and 15 percent of the upper portion, but these percentages and dollar thresholds shift annually.
The result is your PIA — the amount you would receive if you claimed at your full retirement age.
How claiming age changes your monthly payment
You can claim Social Security as early as age 62, but your payment will be permanently reduced. You can also delay claiming past your full retirement age until age 70, and your payment will be permanently increased.
The reduction for claiming at 62 is roughly 25 to 30 percent lower than your PIA, depending on your birth year. The exact percentage varies because the reduction formula is tied to how many months early you claim. If your full retirement age is 67 and you claim at 62, you are claiming 60 months early, which results in a specific reduction percentage set by law.
The increase for delaying past full retirement age is roughly 8 percent per year you wait, up to age 70. If your full retirement age is 67, waiting until 70 gives you a payment roughly 24 percent higher than your PIA. If your full retirement age is 66, waiting until 70 gives you a payment roughly 32 percent higher.
The SSA publishes a table showing the exact reduction or increase for your birth year and claiming age. You can find this on ssa.gov or ask during a phone call to your local Social Security office.
Factors that affect your payment amount
Your work history is the primary factor. If you have significant years with no earnings or very low earnings, those years count as zeros in your 35-year average, which lowers your payment. Conversely, if you worked more than 35 years, the SSA drops your lowest-earning years from the calculation, which can raise your average.
Government pensions can affect your payment if you also receive a pension from work not covered by Social Security — for example, some federal employees, teachers, or public sector workers. The Government Pension Offset (GPO) and Windfall Elimination Provision (WEP) may reduce your Social Security payment or your spousal benefit. These rules are complex and depend on your specific situation and the type of pension you receive.
Your marital status can affect your payment if you are receiving a spousal or survivor benefit, but it does not change your own retirement benefit amount. Your own benefit is based solely on your earnings record.
Earnings after you claim do not change your payment amount if you have reached full retirement age. If you claim before full retirement age and continue working, the SSA reduces your payment by $1 for every $2 you earn above an annual limit (the limit changes yearly). Once you reach full retirement age, this earnings test no longer applies.
How to estimate your payment before you claim
The most accurate way is to create a my Social Security account at ssa.gov. You will need your Social Security number, email address, and a way to verify your identity — usually a phone number or U.S. mailing address on file with the SSA. Once logged in, your Social Security Statement shows your earnings record and provides payment estimates at ages 62, full retirement age, and 70.
If you do not have an online account, you can request a paper statement by mail. Call the Social Security Administration at 1-800-772-1213 (TTY 1-800-325-0778) and ask for a statement to be mailed to you. Processing takes about two weeks.
Online calculators on ssa.gov can also give you a rough estimate if you enter your birth date and current earnings. These are less precise than your actual statement because they use average earnings data, not your personal record, but they show the general range of what you might receive.
What your payment does and does not include
Your Social Security payment is a monthly amount deposited into your bank account or sent by check. It does not include Medicare premiums, which are deducted separately. If you are enrolled in Medicare Part B (medical insurance) or Part D (prescription drug coverage), the SSA deducts those premiums from your Social Security payment before depositing the remainder.
Your payment is subject to federal income tax if your total income exceeds certain thresholds. The thresholds depend on your filing status and other income sources. Up to 85 percent of your Social Security benefit may be taxable if your income is high enough. State income tax treatment varies by state; some states do not tax Social Security at all, while others tax it like other income.
Your payment does not change based on the cost of living after you claim, except for annual Cost-of-Living Adjustments (COLA). The SSA announces the COLA each October, and it takes effect in January. The COLA is based on inflation measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Frequently Asked Questions
Can I see what I will make before I turn 62?
Yes. Log into your my Social Security account at ssa.gov to view your statement, which shows payment estimates at different ages. If you do not have an account, call 1-800-772-1213 to request a paper statement by mail. Both show estimates based on your actual earnings record.
Does working longer increase my Social Security payment?
Yes, if your recent earnings are higher than some of your earlier years. The SSA uses your 35 highest-earning years, so adding a high-earning year can replace a lower-earning year in the calculation. Working additional years with low or no earnings does not help.
What happens to my payment if I was married more than once?
Your own retirement benefit is based only on your earnings record, regardless of how many times you were married. However, you may be able to receive a spousal benefit on an ex-spouse's record if you were married at least 10 years, are at least 62, and are not currently married. That benefit is separate from your own.
Will my payment change after I start receiving it?
Your payment amount stays the same each month unless you return to work before full retirement age (which may trigger the earnings test) or the SSA makes a correction to your earnings record. Annual Cost-of-Living Adjustments increase all payments by the same percentage each January, but your base payment does not change.
How much more will I get if I wait until 70 instead of 62?
The difference depends on your birth year and full retirement age. Waiting from 62 to 70 typically results in a payment 70 to 80 percent higher at age 70 than at age 62. Your my Social Security account shows the exact amounts for your situation.