Your retirement benefit is based on your lifetime earnings in work in which you paid Social Security taxes. Higher income translates to a bigger benefit (up to a point — more on that below). The amount you are entitled to is modified by other factors, most crucially the age at which you claim benefits.
For reference, the estimated average retirement benefit paid by Social Security in 2018 is $1,404 a month. The maximum benefit — the most an individual retiree can get — is $2,788 a month for someone who filed for Social Security in 2018 at full retirement age, or FRA (the age at which you qualify for 100 percent of the benefit calculated from your earnings history).
You’ll only know your own amount for sure when you apply, but there are ways to get a sense of it in advance. The quickest and easiest is to check your online My Social Security account or use AARP’s Social Security Benefits Calculator. Your online account draws on your earnings record on file with Social Security; for the AARP calculator you’ll need to provide your average annual income.
Both tools project what you could collect each month if you start Social Security at age 62, the earliest you can file; at full retirement age, currently 66 and is gradually rising to 67; and at age 70. Between 62 and FRA, Social Security reduces your benefit for filing early; between FRA and 70, it increases your payment as a reward for waiting.
For example, the AARP calculator estimates that a person born on Jan. 1, 1957, who has averaged a $40,000 annual income would get a monthly benefit of $1,108 if they file for Social Security at 62, $1,512 at 66 or $1,955 at 70. The AARP tool can also give you figures for every age in between, gauge the effect on your benefits of continuing to work and help you budget for your retirement years.
You can also get basic benefit estimates by calling the Social Security Administration at 800-772-1213. But remember, no matter where you get the numbers, they are estimates, not promises. Your actual benefit will vary, perhaps significantly, based on fluctuations in your earnings, cost-of-living adjustments, whether you continue to work after claiming benefits and changes in the Social Security law.
Keep in mind
- Social Security sets a cap on how much of your income it takes into account in figuring your benefit. In 2018 the cap is $128,400 (it’s adjusted annually to reflect historical wage trends). Any income above that is not counted in your benefit calculation (and is also not subject to Social Security taxes).