What social security will I get when I retire?

If you are approaching retirement, you may want to know how much Social Security benefits you qualify to receive. Social Security is designed to help replace the income that retired and disabled workers lose when they retire or are unable to work due to a disability. The amount of Social Security benefits you receive depends on several factors.

You can qualify to receive Social Security retirement benefits when you retire if you are at least age 62 or older, and you have earned at least 40 work credits. The amount you receive depends on your age when you claim benefits and how much you earned during your working years. For 2023, the average Social Security retirement benefit is $1,827 a month, while the maximum benefit you can get is $3,627 per month at full retirement age.

What are Social Security benefits?

Social Security pays various types of benefits to workers who retire or become disabled, as well as families of beneficiaries. These benefits are designed to replace the incomes that the beneficiaries lose when they stop working due to age or a disabling condition.

The main types of Social Security benefits include:

Retirement benefits

You will need at least 40 credits equivalent to 10 years of work to qualify for Social Security retirement benefits. If you don’t have enough credits, the earned credits will remain on your record, and you can add more credits if you go back to work after retirement. You can take benefits starting from age 62, wait until the full retirement age, or delay benefits beyond the full retirement age.

Disability benefits

If you have a disability or a medical condition that affects your ability to work for at least a year or is expected to lead to death, you may be eligible for Social Security Disability Insurance (SSDI). Disability benefits are based on the worker's past earnings, and they are paid to eligible disabled workers and their dependent family members. You can receive disability benefits if you have been disabled for five consecutive calendar months.

Survivor benefits

Your spouse, natural/adopted child, parent, and other family members may be eligible for survivor benefits based on your earnings. The number of credits needed to provide survivor benefits depends on the worker's age when they die. While Social Security requires 40 credits for a retired worker to qualify for benefits, younger workers require fewer credits for family members to receive survivor benefits.

When a Social Security-eligible worker dies, the family must ensure the death is reported to Social Security. The family members can apply for survivor benefits by mailing the application to Social Security or applying for benefits at the local Social Security office. The amount of survivor benefits that eligible family members receive depends on their relationship with the deceased worker and the earnings of the deceased. 

How much can I get from Social Security when I retire?

The amount of benefits you are eligible to receive is based on your earnings history in a job covered by Social Security. Higher earnings up to the maximum income limit for Social Security translates to bigger Social Security benefits. Social Security calculates benefits based on your 35 highest-earning years.

Typically, you must be at least age 62 or older and have earned at least 40 credits to receive Social Security retirement benefits. You can wait until you attain the full retirement age to claim the full benefit. The full retirement is 66 if you were born between 1943 to 1954, and it rises by two months in subsequent years until it reaches age 67 for people born in 1960 or later.

For 2023, the average Social Security retirement benefit is $1,827, or $2,972 for a married couple. The maximum Social Security retirement benefit can go up to $3,627, but you must have maxed out the system. You can get the maximum Social Security benefit if you retired at the full retirement age, you worked for at least 35 years and paid into the Social Security system for each of these years, and you earned or exceed the maximum taxable income each year for at least 35 years.

How are Social Security benefits calculated?

Social Security benefits are calculated using the Average Indexed Monthly Earnings (AIME). Social Security applies a formula to this average to determine the Primary Insurance Amount (PIA).

Follow these steps to calculate your Social Security benefits:

Calculate AIME

To determine an insured worker’s benefit, you must first adjust the earnings to reflect the change in wage levels that occurred during the worker’s working years. You need at least 35 years of earnings to calculate AIME. Once you figure out the number of years worked, choose the years with the highest indexed earnings, add these indexed earnings, and divide the total earning by the total number of months in those years. The resulting average is the AIME.

Bend your benefits

Once you have determined your AIME, you should convert this average into PIA by running it through bend points. Social Security publishes bend points each year. For 2023, the bend points are $1,115 and $6,721, and they apply to workers who become eligible for benefits in 2023.

Benefit amount

The benefits formula applies a percentage to the AIME, based on the bend points, to determine the PIA, which is the monthly benefit amount an individual would receive at the full retirement age. PIA is determined as follows:

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.