The Social Security Administration stopped mailing out benefits estimates back in 2011, leaving many of us unclear about how large our Social Security payments will be when we retire. Bottom Line Personal asked Social Security expert Martha Shedden about the average Social Security benefits and the key factors that affect the size of benefits.
As of early 2025, the average Social Security benefit for a retired worker was $1,976 per month, about $23,700 per year. But your benefit could be much different—the maximum possible benefit currently is $5,108 per month. Two main factors affect the size of your benefit…
Amount you earned during your career. How much you earn during your working years determines how much you pay into the Social Security system and thus the size of your future benefits. Technically, what matters is not your career earnings but your earnings during your 35 highest-earning years. The Social Security Administration (SSA) will “index” your annual earnings history to account for inflation, so seemingly modest earning years from early in your career might be among these 35 years even if in nominal terms you earned significantly more later. These indexed earnings are used to calculate a figure known as your Average Indexed Monthly Earnings (AIME). That AIME will be used to calculate your Primary Insurance Amount (PIA)—the amount you’ll receive from Social Security each month if you claim your benefit starting at your Full Retirement Age (FRA). The formula used to calculate PIA is structured so that Social Security benefits replace a higher percentage of a low earner’s earnings than a high earner’s earnings. Example: The PIA of a worker who turns 62 in 2025 is calculated by multiplying the first $1,226 of AIME by 90%…the next $6,165 by 32%…and anything above that by just 15%.
When you start receiving benefits. Estimates of future Social Security benefits often are based on the assumption that people will start receiving their benefits when they reach their Full Retirement Age (FRA), which is between 65 and 67 depending on their year of birth. FRA is 67 for those born in 1960 or later. But you’re not required to begin your benefits when you reach your FRA—you can begin them as late as age 70 or as early as age 62…or as early as 60 in the case of “survivor benefits”—payments made to certain family members after the death of a spouse or other loved one. The longer you wait to claim within that age range, the larger the monthly benefit you’ll receive.
Here’s how claiming age affects the amount you would receive if you were entitled to the average benefit amount of $1,976 at an FRA of 67…
|
Claiming Age |
Monthly Benefit |
|
62 |
$1,383 |
|
63 |
$1,481 |
|
64 |
$1,580 |
|
65 |
$1,712 |
|
66 |
$1,843 |
|
67 |
$1,976 |
|
68 |
$2,133 |
|
69 |
$2,291 |
|
70 |
$2,449 |
Though the SSA no longer automatically mails out estimates of future benefits, you can obtain an estimate online by opening a MySocialSecurity account at SSA.gov. Warning: The SSA’s estimate will assume that the amount you earned in the most recent year is the amount you will earn every year until the age at which you choose to start receiving benefits. Major income fluctuations and/or early retirement could dramatically reduce the accuracy of this estimate.
