Social Security benefits

Estimated benefits

According to the Social Security Administration (SSA)*, in 2020, nearly 9 out of 10 Americans age 65 and older received Social Security benefits. The majority of recipients depend on these benefits for about half their income.

You can get an estimate of your benefits at SSA.gov. The Retirement Estimator calculator accesses your Social Security earnings record when you provide your name, Social Security number, date and place of birth and mother's maiden name.

Keep in mind that even though the estimate is based on your actual earning record, it's still only an estimate. Your actual benefit amount will be determined when your benefits begin and may vary slightly from your estimate due to updates in your earnings record, inflation and assumptions the calculator makes about your future earnings and length of employment.

The U.S. government determines Social Security benefits by how much you earn during your lifetime. The calculation is based on your full retirement age, when you retire and whether you continue working while collecting benefits.

Full retirement age

The age that you are eligible to receive your full Social Security benefit — called your full retirement age — is determined by your year of birth. People born in 1937 or before have a full retirement age of 65. The full retirement age increases slowly for those born after 1937. For anyone born after 1960, the full retirement age is 67.

Retiring early or late

You don't have to wait until your full retirement age to retire. You can retire either earlier or later, although both will affect your Social Security benefits.

You can begin collecting benefits as early as age 62, but doing so reduces your benefits by as much as 30%. Keep in mind that your benefit amount will not readjust once you reach full retirement age. The reduction is permanent to compensate for drawing on Social Security for a longer period of time.

Delaying retirement increases your benefits. Along with adding years of earnings to your Social Security record, you'll receive a delayed retirement credit until age 70.

Working during retirement

You can work after you begin collecting Social Security, but if you're under your full retirement age, your benefits will be reduced $1 for every $2 you earn over the current earning limit until you reach your full retirement age. Good news, though: Once you hit your full retirement age, your benefits are recalculated, taking into account the months that benefits were withheld. Plus, you can then work as much as you want, with no earning limits.

Plan for your future

Take into consideration the factors that determine your Social Security benefits when you're deciding when to retire and when to begin collecting benefits. Knowing how much you'll receive, and when, may be key factors in planning your retirement years. You can estimate what you'll receive by visiting the Social Security Administration's Social Security calculator.