Your payment is based on your lifetime earnings record, the age you start collecting, and how long you live

Social Security does not pay everyone the same amount. The Social Security Administration (SSA) looks at how much you earned during your working years, converts those earnings to a standard value, and calculates a monthly payment based on when you claim. If you wait longer to claim, your payment goes up. If you claim early, it goes down. Your spouse or ex-spouse may also receive a payment based on your earnings record, which does not reduce what you get.

The payment you receive is called your Primary Insurance Amount, or PIA. This is the full retirement benefit you would receive if you claim at your full retirement age — which depends on the year you were born and ranges from 66 to 67 for people born between 1943 and 1960. Most people do not claim at full retirement age, so their actual payment is either higher or lower than their PIA.

Key Takeaways

  • Your payment is based on your 35 highest-earning years; years with no earnings count as zero, which lowers your average.
  • Claiming at 62 reduces your payment by roughly 30 percent compared to your full retirement age amount; claiming at 70 increases it by roughly 24 percent.
  • The SSA sends you a Social Security Statement showing your estimated payment at ages 62, full retirement age, and 70 — you can view it online at ssa.gov or request a paper copy.
  • If you worked for a government employer and received a pension, a rule called the Government Pension Offset may reduce your spousal or survivor benefit.

How the SSA calculates your earnings record

The SSA uses your 35 highest-earning years to calculate your average monthly earnings. If you worked fewer than 35 years, the missing years count as zero, which brings down your average. This is why someone who took time out of the workforce — to raise children, care for a family member, or recover from illness — may have a lower payment than someone with 35 continuous years of earnings.

The SSA adjusts your historical earnings for inflation using a formula called wage indexing. This means your 1990 earnings are not compared dollar-for-dollar to your 2020 earnings; instead, they are adjusted upward to reflect what they would be worth in today's dollars. The adjustment happens automatically — you do not do anything. The result is your Average Indexed Monthly Earnings, or AIME.

Once the SSA has your AIME, it applies a formula called the Primary Insurance Amount formula to calculate your full retirement benefit. This formula is progressive, meaning it replaces a higher percentage of earnings for people who earned less. Someone who earned $20,000 a year gets a larger percentage of that income replaced than someone who earned $100,000 a year. The exact percentages change each year based on national wage trends.

How claiming age changes your payment

Your full retirement age is the age at which you receive your full Primary Insurance Amount with no reduction. For people born in 1943 or later, this age ranges from 66 to 67 depending on your birth year. You can claim as early as 62, but your payment will be permanently reduced. You can also wait until 70, and your payment will be permanently increased.

The reduction for claiming at 62 is roughly 30 percent lower than your full retirement age amount. The increase for waiting until 70 is roughly 24 percent higher than your full retirement age amount. These percentages are set by law and do not change. The trade-off is straightforward: claim early and get a smaller check for a longer time, or claim late and get a larger check for a shorter time. Neither choice is "right" — it depends on your health, your family history, and how long you expect to live.

If you claim before your full retirement age and continue working, the SSA will reduce your payment by $1 for every $2 you earn above a yearly limit. Once you reach your full retirement age, this earnings limit no longer applies, and you receive your full payment no matter how much you work.

How family members' payments are calculated

Your spouse, ex-spouse, or adult child may receive a payment based on your earnings record. A spouse at full retirement age can receive up to 50 percent of your Primary Insurance Amount. A spouse who claims before full retirement age receives less. An ex-spouse can receive a spousal benefit if you were married for at least 10 years, you are both at least 62, and you have been divorced for at least 2 years — or if you are at least 62 and your ex-spouse is at least 62 and has already claimed.

A child under 19 (or 19 if still in high school) can receive up to 50 percent of your Primary Insurance Amount. A child who is disabled before age 22 can receive a payment for life. These family payments do not come out of your benefit — the SSA pays them separately. However, there is a family maximum: the total amount paid to all family members on your record cannot exceed 150 to 180 percent of your Primary Insurance Amount. If family members' payments would exceed this cap, each payment is reduced proportionally.

How government pensions affect your payment

If you worked for a government employer — a city, county, state, or federal agency — and received a pension from that job, two rules may reduce your Social Security payment. The first is called the Government Pension Offset, or GPO. It reduces your spousal or survivor benefit (not your own retirement benefit) by two-thirds of your government pension. For example, if your government pension is $900 a month, the GPO reduces your spousal benefit by $600.

The second rule is called the Windfall Elimination Provision, or WEP. It reduces your own retirement benefit if you receive a government pension and also have Social Security credits from other work. The reduction is calculated using a modified formula and is capped at 50 percent of your government pension amount. If your government pension is $1,000, the WEP reduction cannot be more than $500.

These rules explore only if your government job was not covered by Social Security — meaning you did not pay Social Security taxes on that income. If you paid Social Security taxes on your government job, neither rule applies. You can find out whether your government job was covered by contacting your former employer's human resources or pension office.

How to find your estimated payment

The SSA sends you a Social Security Statement that shows your earnings record and your estimated payment at three claiming ages: 62, your full retirement age, and 70. You can view your statement online by creating a my Social Security account at ssa.gov. This is the fastest way to see your estimates.

If you do not have internet access or prefer a paper copy, you can request a statement by phone at 1-800-772-1213 (TTY 1-800-325-0778) or by visiting your local Social Security office. The SSA will mail it to you within two weeks. The statement shows your estimated payments in today's dollars, so you can compare the amounts directly without doing any math yourself.

Keep in mind that these are estimates based on your current earnings record and the assumption that you will continue working until you claim. If you stop working, take time off, or have a significant change in income, your actual payment may be different. The SSA recalculates your benefit based on your final earnings record when you claim.

Frequently Asked Questions

Does my payment go up if I keep working after I claim?

Yes, but only if you have not yet reached your full retirement age. The SSA recalculates your benefit each year to include your new earnings, and it may increase your payment. Once you reach your full retirement age, your benefit is locked in and does not change based on new earnings. However, if you delayed claiming past your full retirement age, your payment continues to increase by roughly 8 percent per year until you claim or reach 70.

What if I worked in another country?

Social Security credits earned in another country may count toward your benefit if that country has a totalization agreement with the United States. These agreements allow you to combine credits from both countries to meet the 40-credit requirement for retirement benefits. You can find a list of countries with agreements on the SSA website, or call 1-800-772-1213 to ask whether your work history qualifies.

Can I see how much my payment would be if I claimed at a different age?

Your Social Security Statement shows estimates at three ages: 62, full retirement age, and 70. If you want to see an estimate at a different age, you can call the SSA at 1-800-772-1213 and speak with a representative, or create a my Social Security account and use the benefit calculator tool on the website.

Does my marital status affect my payment?

Your own retirement benefit does not change based on whether you are married, divorced, or single. However, your spouse or ex-spouse may be able to receive a payment based on your record, and your survivor benefit (paid to your family if you die) may be affected by your marital status. If you remarry after age 60, it does not affect your own benefit or your ex-spouse's benefit.

What happens to my payment if I move to another state or country?

Your payment amount does not change if you move within the United States. If you move to another country, you can continue receiving benefits in most countries, but a few countries have restrictions. Call the SSA at 1-800-772-1213 before you move internationally to confirm that your benefits will continue.