Social Security replaces part of the income you earned during your working years

Social Security is a monthly payment from the federal government based on your work history. The amount you receive depends on how much you earned, how long you worked, and the age when you start taking payments. Most people receive between $1,000 and $3,500 per month, though the exact figure varies widely.

The payment is not meant to cover all your living expenses. It typically replaces about 40 percent of what you earned before retirement. If you had a higher income during your working years, your replacement rate will be lower. If you earned less, Social Security may replace a larger share of your former income.

You can start taking Social Security as early as age 62, but the monthly amount will be smaller than if you wait. If you wait until your full retirement age (between 66 and 67 for most people now), you receive the standard amount. If you delay until age 70, your monthly payment increases by about 8 percent for each year you wait.

Key Takeaways

  • Social Security provides a monthly income based on your earnings record, replacing roughly 40 percent of pre-retirement income for the average worker.
  • Your payment amount depends on when you start: smaller at 62, standard at full retirement age, and larger if you wait until 70.
  • You can receive benefits as a spouse or survivor even if you did not work enough to earn your own Social Security.
  • Social Security includes Medicare may be able to access at 65, which covers hospital care, doctor visits, and prescription drugs with different cost-sharing levels.
  • The program adjusts payments yearly for inflation, so your monthly amount increases most years to keep pace with rising costs.

Spouse and survivor benefits let family members receive payments on your record

If you are married, your spouse may receive a payment based on your work history even if they did not earn enough Social Security credits themselves. A spouse can receive up to 50 percent of your full retirement age benefit amount. This applies whether your spouse worked or stayed home to raise children.

If you pass away, your spouse, children under 19 (or 19 if still in high school), and dependent parents may each receive a portion of your Social Security. The total amount paid to your family cannot exceed about 150 to 180 percent of what you were receiving. Each family member's share is calculated separately, so the more family members who collect, the smaller each individual payment becomes.

Divorced spouses can also receive benefits on your record if the marriage lasted at least 10 years and your ex-spouse is at least 62 years old. This does not reduce your own benefit or your current spouse's benefit.

Medicare enrollment is automatic when you turn 65

When you reach 65, you become may be able to access for Medicare, the federal health insurance program. If you are already receiving Social Security, Medicare enrollment happens automatically. If you are not yet taking Social Security, you will need to sign up for Medicare yourself during your enrollment window.

Medicare has four parts. Part A covers hospital stays, skilled nursing care, and hospice. Part B covers doctor visits, outpatient care, and preventive services. Part D covers prescription drugs. Part C, called Medicare Advantage, is an alternative to Parts A and B offered by private insurance companies.

You pay premiums for Parts B and D, and these amounts are usually deducted from your Social Security check. Part A is free for most people. Medicare does not cover everything — you will have deductibles, copayments, and coinsurance depending on which parts you choose.

Cost-of-living adjustments keep your payment in line with inflation

Each year, Social Security checks increase by a percentage tied to inflation. This is called a cost-of-living adjustment, or COLA. The adjustment is based on the Consumer Price Index, which measures how prices change for goods and services across the economy.

Some years the adjustment is small — in recent years it has ranged from less than 1 percent to over 8 percent. In years when inflation is low or negative, there is no increase. The adjustment applies to all Social Security payments: retirement benefits, survivor benefits, and disability benefits.

The COLA is announced in October each year and takes effect in January. Your new payment amount will appear in your January check. This means your purchasing power does not erode as quickly as it would if your payment stayed the same while prices rose.

Supplemental Security Income (SSI) provides additional help for low-income seniors

If your Social Security payment is very small or you have little other income, you may receive Supplemental Security Income (SSI) in addition to Social Security. SSI is a separate federal program for people age 65 and older, blind individuals, and people with disabilities who have limited income and resources.

SSI payments vary by state because some states add money to the federal base amount. In 2024, the federal SSI payment for an individual is $943 per month, though your state may provide more. To receive SSI, your monthly income must be below a certain limit and your countable resources (savings, investments, property) must be under $2,000 for an individual or $3,000 for a couple.

Unlike Social Security, which is based on your work history, SSI is a needs-based program. You do not have to have worked to receive it. However, the income and resource limits are strict, and receiving SSI may affect your may be able to access for other programs like Medicaid or housing information.

Working while receiving Social Security has income limits and tax consequences

If you start Social Security before your full retirement age and continue working, your benefits are reduced if your earnings exceed a certain amount. In 2024, if you earn more than $23,400 per year, Social Security deducts $1 from your benefit for every $2 you earn above that limit. This applies only in the year you reach full retirement age; once you reach full retirement age, there is no earnings limit.

Your Social Security benefits may also be subject to federal income tax. If your combined income (Social Security plus other income) exceeds certain thresholds, up to 85 percent of your Social Security may be taxable. Combined income includes your adjusted gross income, nontaxable interest, and half of your Social Security benefits.

State taxes vary. Some states do not tax Social Security at all. Others tax it the same way the federal government does. A few states have their own rules. You can request that taxes be withheld from your Social Security check, or you can pay estimated taxes quarterly.

Divorced and widowed individuals have specific benefit rules

If you are divorced, you can receive benefits on your ex-spouse's record if you were married for at least 10 years, you are at least 62 years old, and you are not currently married. Your benefit is up to 50 percent of your ex-spouse's full retirement age amount if you wait until your full retirement age to claim. If you claim at 62, the amount is smaller.

If your ex-spouse has passed away, you can receive survivor benefits on their record. A surviving divorced spouse can receive up to 100 percent of what the deceased was receiving (or would have received). You must be at least 60 years old, or 50 if you are disabled, unless you are caring for a child under 16.

If you are widowed and have not remarried, you can receive survivor benefits at any age if you are caring for the deceased's child who is under 16. Otherwise, you must wait until age 60 (or 50 if disabled) to receive a widow's or widower's benefit.

Frequently Asked Questions

Can I receive Social Security and a pension from a government job at the same time?

It depends on the type of government job. If you worked for a federal agency and paid into Social Security, you can receive both. If you worked for a state or local government and did not pay Social Security taxes, the Windfall Elimination Provision may reduce your Social Security benefit. The Government Pension Offset may also reduce any spouse or survivor benefits you receive based on your own work record.

What happens to my Social Security if I move out of the country?

You can receive Social Security payments while living in most countries. However, payments to some countries are restricted or stopped. If you move, contact Social Security to update your address. Some countries require you to report your income or prove you are still alive to continue receiving payments. The rules vary by country, so check with Social Security before you move.

How much will my Social Security payment be?

Your payment depends on your earnings history and the age you start. You can create a my Social Security account at ssa.gov to see your estimated benefit amount. The estimate assumes you continue working until your full retirement age. If you plan to retire earlier or later, your actual benefit will differ. You can also call Social Security at 1-800-772-1213 to request a benefit estimate.

Do I have to take Social Security at my full retirement age?

No. You can start as early as 62 or delay until 70. Starting early means smaller monthly payments for the rest of your life. Delaying means larger monthly payments. The break-even point is usually around age 80, so if you expect to live longer, waiting often results in more total lifetime benefits. Your health, family history, and financial needs should guide your decision.

Will Social Security still be available when I retire?

Social Security is funded by payroll taxes from current workers, so it will continue as long as people work. However, the trust fund that covers benefits is projected to be depleted around 2034 if no changes are made. At that point, incoming tax revenue would cover about 80 percent of scheduled benefits. Congress may change the program before then, but the exact changes are unknown.