How Much Social Security Will I Get?
Most retirement calculators don’t factor in your Social Security benefits, which can make budgeting for retirement harder. The average monthly Social Security check in July 2023 was just under $1,704, but that amount will differ based on the type of recipient.
The program can be a nice cushion during retirement, but it’s worth calculating how much Social Security you will get—or at least, estimate your monthly payouts—so you can plan appropriately. By understanding the factors that influence your benefit amount, it’s easier to create, and stick to, a full retirement plan that meets your needs.
How Much Social Security Can I Get During Retirement?
Your Social Security benefit payment is based on a sliding scale that accounts for your income, how many years you worked, and what age you want to start receiving your benefits. To determine how much Social Security you can get, create an account on the Social Security website. With an account, you can estimate your benefits in one of two ways.
- Use the Social Security Quick Calculator, which will provide a rough benefits estimate in today’s dollars as well as inflation-adjusted dollars.
- Download your Social Security Statement, which details your career earnings and progress toward eligibility for Social Security retirement benefits and Medicare.
The Social Security Administration also offers several other planning tools, such as a calculator to find your full retirement age, an age-based benefit adjuster, and a formula to determine the impact on a spouse’s benefits if you retire early or later.
Social Security Benefits by the Numbers: 2023
According to the most recent data for 2023, the average social security benefit for retired workers is $1,838.58. This number will vary based on the type of recipient, but averages like these can help you estimate your monthly checks and plan for the future.
|Aged couple, both receiving benefits||$2,729.90|
|Widowed mother, two children||$3,372.59|
|Disabled worker, spouse and one or more children||$2,365.36|
|All disabled workers||$1,486.42|
Source: Social Security Administration, July 2023
The maximum Social Security benefit in 2023 is $3,627, which you can get if you wait until full retirement age. If you retire at age 62 in 2023, your maximum benefit decreases to $2,572. If you retire at age 70 in 2023, your maximum benefit increases to $4,555. However, most people will not meet or exceed Social Security’s annual maximum earnings ($160,300 in 2023 for at least 35 years of work) to qualify for this benefit.
There is also a minimum Social Security benefit amount called the Special Minimum Primary Insurance Amount (PIA), but it only applies to a minimal number of retirees who worked at least 11 years with a small income each of those years.
The Social Security Benefits Formula
You may be wondering, “how is my Social Security calculated?” There are several calculations the SSA uses to determine your benefits—and they get a bit complicated. The government will assess factors like inflation-adjusted average earnings (AIME) and primary insurance amount (PIA) to compute your benefits down to the cent. If you’d like to get a more specific number than what’s noted on your statements, use this example to learn how to calculate your Social Security:
Your AIME considers your 35 highest-paid working years, adjusted for inflation, divided by 420 (12 months x 35 years).
Your PIA is broken down into bend points. For 2023, the bend points are:
- 90% of the first $1,115 of your AIME, plus
- 32% of your AIME between $1,115 and $6,721, plus
- 15% of your AIME over $6,721
For example, if your AIME is $7,000, you would complete the following calculations:
- 90% of $1,115 = $1,003.50, plus
- 32% of $5,606 ( $6,721 – $1,115) = $1,793.92
- 15% of $279 ($7,000 – $6,721) = $41.85
With these figures, your monthly Social Security benefit would be: $1003.50 + $1,793.92 + $41.85 = $2,839.27
How Much More Will I Get if I Retire Later? Or Earlier?
Perhaps the most significant factor in determining your monthly Social Security benefits each month is the age you retire and start collecting benefits. What you receive when you start taking payments is what you’ll receive for the rest of your life, so it’s an important consideration.
You can start receiving benefits as early as 62, the current early retirement age, but you’ll receive a lower amount—about 75% less, give or take. If you wait until full retirement age, which depends on the year you were born, you’ll receive the whole monthly amount. You might also consider leveraging delayed retirement credits to boost your benefits by 30% or more. You can accrue these credits up to age 70.
The age at which you retire is an individualized decision. Consider your health and financial needs. You can also chat with a financial advisor to help formulate a plan.
Learn more: The Latest Social Security Statistics
Other Factors That Affect Social Security Benefit Amount
Cost of Living Increases (COLA): Each year, the SSA announces cost of living adjustments (COLA) to help offset inflation. The 2023 COLA is 8.7%. Your benefits will increase with the COLA starting at age 62, regardless of when you claim your benefits.
Income history: The higher your income, the higher benefit you’ll get. The Administration uses 35 years of earnings to calculate your benefits. If you haven’t worked for 35 years, your non-earning years will count as zero.
Available pensions: If you received a pension from a government job but did not pay Social Security taxes during employment, your benefit amount will be reduced. For example, this might pertain to public school employees or those employed by foreign companies.
“Nobody likes surprises at retirement time. If you worked for a city, state, or federal employer and are a candidate for a pension, make sure you understand how the Windfall Elimination Provision and Government Pension Offset provisions might decrease your benefit amount,” Christopher Hensley, retirement planning professional and founder of Houston First Financial Group advises.
Social Security taxes: Up to 50% of Social Security income is taxable if you have a total gross income, including Social Security, of at least $25,000 or $32,00 for couples filing jointly. Up to 85% of benefits are taxable if your combined gross is at least $34,000 or $44,000 for a couple filing jointly. The IRS has a handy worksheet you can use to calculate your total income taxes if you receive Social Security benefits.
Can I Still Get Social Security If I Work During Retirement?
If you’re earning income while also drawing Social Security, your benefits will be affected if you surpass the yearly earnings limit—but only if you take early Social Security payments.
- For those under their full retirement year: $1 is deducted from your payments for every $2 earned above the annual limit. For 2023, that limit is $21,240. So, if you earn $25,000 a year ($3,760 over the limit), your benefits will be reduced by $1,880.
- For those in their full retirement year: $1 is deducted from your payments for $3 earned above the annual limit. For 2023, that limit is $56,520. This only applies to earnings before the month you reach full retirement age.
Once you reach your full retirement age, your Social Security benefits are not affected by how much you earn. This cap does not apply to investments, pensions, annuities, or capital gains.
Bottom Line: Think of Social Security as Part of Your Overall Retirement
Regardless of your estimated Social Security check, the benefits should not be your only source of income in retirement. You can create a more comprehensive and secure retirement plan by incorporating a 401(k) or IRA investments along with your Social Security.