Social Security Benefits Guide: How Much Will You Get?

Social Security provides retirement income to over 67 million Americans and will likely be a significant part of your retirement plan. But most people do not understand how benefits are calculated, when to claim, or what the program's future looks like. Here is what the data shows.

Average and Maximum Benefits in 2025

After the 2.5% cost-of-living adjustment (COLA) for 2025, here are the current benefit levels:

Average retired worker benefit: $2,005 per month ($24,060 per year)

Maximum benefit at Full Retirement Age (67): $4,018 per month

Maximum benefit at age 62: $2,831 per month

Maximum benefit at age 70: $5,108 per month

The difference between claiming at 62 and 70 is enormous — $2,277 per month, or $27,324 per year. Over a 20-year retirement, that decision is worth over $500,000.

How Benefits Are Calculated

Social Security uses your 35 highest-earning years to calculate your benefit. The formula:

Your earnings for each year are indexed for wage growth

The highest 35 years of indexed earnings are averaged to get your Average Indexed Monthly Earnings (AIME)

A progressive formula converts AIME to your Primary Insurance Amount (PIA) — the benefit you receive at Full Retirement Age

The PIA formula for 2025 applies "bend points" that make the system progressive:

90% of the first $1,174 of AIME

32% of AIME between $1,174 and $7,078

15% of AIME above $7,078

This means Social Security replaces a higher percentage of income for lower earners. Someone earning $30,000 per year might see 55-60% income replacement, while someone earning $160,000 might see only 25-30%.

Full Retirement Age by Birth Year

Your Full Retirement Age (FRA) determines when you receive 100% of your calculated benefit:

Born 1955: 66 and 2 months

Born 1956: 66 and 4 months

Born 1957: 66 and 6 months

Born 1958: 66 and 8 months

Born 1959: 66 and 10 months

Born 1960 or later: 67

Most working-age adults today have a FRA of 67. This is the baseline — claiming earlier or later adjusts your benefit.

Early vs. Late Claiming

Claiming at 62 (earliest possible):

Benefit reduced by approximately 30% from FRA amount

For every month before FRA, benefit is reduced by 5/9 of 1% (first 36 months) or 5/12 of 1% (additional months)

Best if you need the income, have health concerns, or have a shorter life expectancy

Claiming at FRA (age 67 for most):

You receive 100% of your calculated benefit

No reduction, no bonus

Delaying to 70:

Benefit increases 8% for each year you delay past FRA

Maximum increase: 24% over FRA benefit (3 years x 8%)

No additional benefit for delaying past 70

Best if you are in good health, have other income sources, and expect a long life

The break-even point between claiming at 62 and 67 is typically around age 78-80. If you live past that age, the higher benefit from waiting pays off cumulatively.

The Earnings Test

If you claim benefits before FRA and continue working, the earnings test applies:

In 2025, $1 in benefits is withheld for every $2 earned above $22,320

In the year you reach FRA, the threshold rises to $59,520 and withholding drops to $1 for every $3 earned above the limit

After FRA, there is no earnings test — you can earn unlimited income

Important: Withheld benefits are not lost. They are added back to your monthly benefit at FRA, resulting in a higher payment going forward. But the short-term reduction can create cash flow challenges.

The Trust Fund: What Happens in 2034?

The 2025 OASDI Trustees Report projects the combined trust fund will be depleted by 2034. At that point, ongoing payroll tax revenue would cover approximately 81% of scheduled benefits.

This does not mean Social Security disappears. Even without any legislative changes, the system can pay about 80% of benefits indefinitely from current tax revenue. Congress has historically intervened before benefit cuts — the last major reform was in 1983, when the trust fund was months from depletion.

Possible fixes include raising the payroll tax cap (currently $176,100 in 2025), modestly increasing the payroll tax rate, adjusting the full retirement age, or modifying the COLA formula. Most experts expect some combination of these changes before 2034.

How to Plan Around Social Security

Do not plan for Social Security to be your only retirement income. The average benefit of $24,060 per year is barely above the poverty line for a single person. Build additional savings through a 401(k) or IRA — use our Retirement Calculator to model your total picture.

Check your estimated benefit at ssa.gov/myaccount. Your actual benefit depends on your specific earnings history.

Delay claiming if you can afford to. Each year you wait past 62 increases your lifetime benefit, especially if you live to 85+.

Coordinate with your spouse. Married couples have strategies like having the higher earner delay to 70 while the lower earner claims early, maximizing household benefits.

Social Security and Taxes

If your combined income (adjusted gross income + nontaxable interest + half of Social Security benefits) exceeds $25,000 (single) or $32,000 (married filing jointly), up to 85% of your Social Security benefits may be taxable. Use our Tax Calculator to see how Social Security affects your overall tax picture, and check where your salary ranks with our Salary Percentile Calculator.