Quiz: How Social Security Calculates Retirement Benefits

Starting Social Security early will lower your benefit by up to 30 percent, and the reduced rate is locked in for life. On the other hand, you can get up to 32 percent more than your basic benefit by waiting until age 70 to claim.

Learn more about deciding when to claim benefits

People who claim benefits before full retirement age and continue to work are subject to Social Security’s earnings test, which may temporarily reduce monthly payments. In 2026, most of those covered by the test lose $1 in benefits for every $2 in work income above $24,480. Much less is withheld in the year in which you reach full retirement age. Once you pass that milestone, the earnings test goes away and the SSA adjusts your benefit, so over time, you recoup the prior withholding. 

Learn more about how work can affect benefits

A federal rule called the Windfall Elimination Provision (WEP) previously reduced Social Security payments for people who qualified for benefits (via paying Social Security taxes on their income) but also received a pension from other work in which they did not pay into Social Security (as is the case with some state and local government agencies). The WEP, which affected about 2.1 million people, was repealed when the Social Security Fairness Act became law in January 2025.    

Your basic benefit can change annually based on whether there is a cost-of-living adjustment (COLA) for that year, based on the previous year’s inflation rate. AARP projects that beneficiaries will get a 3.5 percent COLA for 2027. Social Security will also increase your benefit if you worked the previous year and your income ranked among your 35 highest-earning years.

Learn more about how Social Security recalculates benefits

Knowing roughly how much you can expect to receive by claiming Social Security at various ages and how those payments fit into your overall budgeting are key elements of retirement planning.

Try AARP’s Social Security Calculator