Your payment is based on your earnings record and the age you claim

Social Security adds up your highest 35 years of earnings, adjusts them for inflation, and divides by 420 months to find your Primary Insurance Amount (PIA)—the base number used to calculate what you receive. If you claim at your full retirement age (66 to 67, depending on birth year), you get 100 percent of that amount. If you claim earlier, the payment is permanently reduced. If you claim later, it increases by about 8 percent per year until age 70.

The formula itself is progressive: it replaces a higher percentage of low earners' income than high earners' income. Someone who earned $20,000 a year gets back a larger share of their lifetime earnings than someone who earned $150,000 a year. This is intentional—Social Security is designed to provide a foundation, not to replace your full pre-retirement income.

Your actual payment also depends on whether you worked long enough to be insured. You need 40 credits (roughly 10 years of work) to receive retirement benefits on your own record. Spouses and ex-spouses can receive benefits based on your earnings even if they did not work that long, but the rules for that are separate.

Key Takeaways

  • Social Security uses your 35 highest-earning years, adjusted for inflation, to calculate your base payment amount.
  • Claiming at full retirement age (66 to 67) gives you 100 percent of your calculated benefit; claiming earlier reduces it permanently, and claiming later increases it.
  • The formula replaces a higher percentage of income for lower earners than for higher earners by design.
  • You need 40 work credits (about 10 years of earnings) to receive retirement benefits on your own record.
  • Spousal and ex-spousal benefits follow different rules and do not require the recipient to have worked 40 credits themselves.

How the 35-year earnings average works

Social Security looks back at your entire work history and pulls out your 35 highest-earning years. If you worked fewer than 35 years, zeros are added for the missing years, which lowers your average. If you worked more than 35 years, only the highest 35 count—extra years of low earnings do not hurt you, but they also do not help unless they replace a zero or a very low year.

Before averaging, each year's earnings are adjusted for inflation using a national wage index. This means a dollar you earned in 1990 is not compared directly to a dollar you earned in 2020. Instead, both are converted to an equivalent value in a standard year (usually the year you turn 60), so the comparison is fair. This adjustment is why your statement shows both your actual earnings and your "indexed" earnings.

If you have a year with no earnings—because you were unemployed, in school, or caring for children—that year counts as zero. Some people can exclude years of low earnings if they were caring for a child under 16, but you have to request this; it does not happen automatically.

The bend points: why low earners get a better deal

Once your 35-year average is calculated, Social Security applies a formula with two bend points—dollar thresholds that change every year. In 2024, the bend points are $1,174 and $7,078 (these numbers change annually based on wage growth).

The formula works like this: you receive 90 percent of earnings up to the first bend point, 32 percent of earnings between the first and second bend point, and 15 percent of earnings above the second bend point. This means if your average earnings are $2,000 a month, you get 90 percent of $1,174 (which is $1,057) plus 32 percent of the remaining $826 (which is $264), for a total of $1,321. A higher earner with $8,000 a month average gets 90 percent of $1,174, plus 32 percent of $5,904, plus 15 percent of $922—a total of $2,656. The lower earner's benefit is 66 percent of their average earnings; the higher earner's is 33 percent. Both are important, but the formula tilts toward replacing more of what lower-income workers lost.

These bend points are adjusted each year for wage growth, so the thresholds move up. This keeps the formula's intent consistent even as wages rise over time.

Age and claiming decisions: the permanent effect on your payment

Your Primary Insurance Amount is calculated as if you claim at your full retirement age. But you can claim as early as 62 or as late as 70, and each year you wait or claim early changes your monthly payment permanently.

If you claim at 62 (the earliest), your payment is reduced by about 30 percent if your full retirement age is 67. If your full retirement age is 66, the reduction is about 25 percent. These reductions are permanent—even after you reach full retirement age, your payment does not go back up. The reduction is calculated month by month, so claiming one month early costs you about 0.55 percent of your benefit.

If you delay past your full retirement age, your payment increases by about 8 percent per year (or 0.67 percent per month) until you reach 70. After 70, there is no additional increase, so most people do not claim after 70 unless they have other reasons. Someone who waits from 67 to 70 receives about 24 percent more per month for life than someone who claims at 67.

This is why the decision of when to claim matters so much: it is not about getting money sooner versus later, but about how much you receive each month for the rest of your life. The break-even point—where total lifetime benefits are equal—is usually around age 80 to 82, depending on your full retirement age.

Spousal and ex-spousal benefits: different rules

If you are married, your spouse can receive a benefit based on your earnings record even if they never worked or did not work long enough to earn their own benefit. The spousal benefit is up to 50 percent of your Primary Insurance Amount, but only if your spouse claims at their full retirement age. If they claim earlier, the reduction is steeper than it is for retirement benefits.

An ex-spouse can also receive a benefit on your record if the marriage lasted at least 10 years, you are at least 62, and you are divorced (not just separated). The ex-spouse does not need your permission, and it does not reduce your own benefit. However, if your ex-spouse is under full retirement age, their benefit is reduced, and if they remarry, they lose the benefit (unless the new marriage ends).

Spousal benefits are calculated differently than retirement benefits and do not use the bend-point formula. They are a straight percentage of your PIA, and the rules for when you can claim and how much you receive are separate from your own claiming decision.

Survivor benefits for family members

If you die, your family members may receive benefits based on your earnings record. Your widow or widower can receive up to 100 percent of what you were receiving (or would have received) at full retirement age. Children under 19 (or 23 if in high school) can each receive up to 75 percent of your benefit. A parent age 62 or older can receive up to 75 percent.

The total amount paid to all family members combined cannot exceed about 150 to 180 percent of your Primary Insurance Amount. If multiple family members are receiving benefits, each person's share is reduced proportionally to stay within this family maximum. Survivor benefits are not reduced if you claimed early—they are based on what you would have received at full retirement age.

How to see your own calculation

You can view your earnings record and an estimate of your benefit on your my Social Security account at ssa.gov. You will need to create an account with a username and password, or sign in using Login.gov. Your account shows your actual earnings year by year, your indexed earnings, and an estimate of your benefit at different claiming ages.

The estimate assumes you continue working at your current pace until you claim. If you plan to retire earlier or later, or if your earnings will change significantly, the estimate will not be exact. But it gives you a realistic picture of what to expect.

If you find an error in your earnings record, you can correct it through your account or by contacting Social Security directly. Errors are more common than most people think—employers sometimes report earnings to the wrong Social Security number, or earnings are reported late. Fixing errors before you claim can increase your benefit.

Frequently Asked Questions

What if I did not work 35 years?

Social Security counts zeros for years you did not work. If you worked 30 years, five zeros are included in the calculation, which lowers your average. However, you only need 40 credits (about 10 years of work) to be insured for retirement benefits. Working more years, even at low earnings, can help if those years replace zeros or very low years in your record.

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

Yes, but only if your new earnings are higher than one of your 35 highest years. Social Security recalculates your benefit each year based on your updated earnings record. If you earned more in the current year than in one of your previous 35 highest years, that year replaces the lowest year in your calculation, and your benefit increases. This happens automatically; you do not need to report it.

How much does claiming one year early reduce my benefit?

The reduction depends on your full retirement age. If your full retirement age is 67 and you claim at 66, your benefit is reduced by about 6.7 percent. If you claim at 65, it is reduced by about 13.3 percent. If you claim at 62, it is reduced by about 30 percent. The reduction is permanent—your payment does not increase when you reach full retirement age.

Can I get a higher benefit if my spouse earned more than me?

No. Your own retirement benefit is based only on your own earnings record. However, you may be able to receive a spousal benefit if your spouse earned significantly more. The spousal benefit is up to 50 percent of your spouse's Primary Insurance Amount, minus your own retirement benefit. You cannot receive more than you would get from your own record alone.

What happens to my benefit if I was self-employed?

Self-employment income is counted the same way as wages, but you pay both the employee and employer portions of Social Security tax (15.3 percent total, though you can deduct half as a business expense). Your net self-employment income is reported on your tax return and sent to Social Security. Gaps in self-employment income count as zeros, just like years with no wages.