Social Security Calculator

How to Calculate Your Social Security Benefits

Social Security plays a vital role in the retirement plans of millions of Americans. Among beneficiaries 65 and older, 39% of men and 44% of women rely on Social Security for more than 50% of their retirement income, according to the Social Security Administration Fact Sheet.

In 2025, potential monthly benefits max out at $5,108, based on SSA data. How much you’ll collect will depend on a variety of factors. Our Social Security calculator can help you estimate how your benefits vary depending on the age you claim them.

Do you need help managing your retirement savings? Speak with a financial advisor today.

As you plan for Social Security, it can help to understand a few basic concepts and how they help determine the value of your benefit:

• Early retirement age: The age (62 years old) at which you first become eligible for retirement benefits, although they’ll be permanently reduced.
• Full retirement age (FRA): The age at which you can receive your full retirement benefit, known as your primary insurance amount (PIA). For most people, FRA is between 66 and 67.
• Earnings record: A year-by-year record of how much income you’ve earned over your career. These earnings stay on your Social Security record even if you change jobs or take time away from work.
• Credits: You accumulate credits based on your earnings and Social Security taxes that you pay. At least 40 credits are typically required to be eligible for Social Security. In 2025, you receive one credit for every $1,810 in annual earnings, but can’t earn more than four credits per year.
• Cost-of-living adjustments: Social Security COLAs are annual benefit increases tied to inflation.

Who Is Eligible for Social Security Benefits?

Anyone who pays into Social Security for at least 40 calendar quarters (10 years) is eligible for retirement benefits based on their earnings record. You are eligible for your full benefits once you reach full retirement age, which falls between 66 and 67, depending on when you were born. Here's a breakdown:

So imagine you’re 40 years old and earn $75,000 per year. Using our Social Security calculator, you can get a sense of how much your benefits would be at different ages. If you wait until full retirement age, you would collect $51,798 per year in benefits. However, filing early at 62 would reduce your payments to approximately $35,963.

But what if you delay your benefits beyond full retirement age? Doing so increases your payment by 8% per year until age 70. If your full retirement age is 67, your benefit could be 24% higher by delaying it until you’re 70. For example, filing for retirement benefits at 70 would boost your annual payments to $64,230.  

The bottom line: You’re eligible for Social Security benefits if you’ve paid into the system for at least a decade, but your actual benefits will depend on what age you start claiming.

How Are Social Security Benefits Calculated?

Our Social Security tool makes it easy to calculate your benefits at different ages in a matter of moments. However, it can help to understand how the SSA determines these numbers. Here’s a closer look at how Social Security benefits are calculated.

1. Average Indexed Monthly Earnings (AIME)

To calculate your benefits, the Social Security Administration starts by determining your Average Indexed Monthly Earnings (AIME). This figure is an average of your 35 highest-earning years, adjusted for inflation. If you worked fewer than 35 years, zeroes will apply for years with missing earnings. The total is then divided by 420 months and the result is your AIME.

2. Primary Insurance Amount (PIA)

Your AIME helps determine your PIA, which is how much you’ll receive if you wait until full retirement age. To calculate your PIA, the Social Security Administration applies “bend points” to your AIME, which are adjusted each year for inflation.  

Here is the PIA formula using 2025 bend points:

• 90% of first $1,226 of AIME
• 32% of AIME between $1,226 – $7,391
• 15% of AIME over $7,391

For example, if your AIME is $10,000, you would calculate your PIA by adding these three totals together:

• $1,226 x 0.90 = $1,103.40
• ($7,391 - $1,226)  x 0.32 = $1,972.80
• ($10,000 - $7,391) x 0.15 = $391.35

In this example, your PIA would be $3,467.55.  

3. Claiming Age Adjustments

If you wait until your full retirement age to collect Social Security, your PIA is more or less what you can expect to receive.  

However, filing for Social Security before full retirement age results in lower lifetime payments. The Social Security Administration reduces benefits by 5/9 of 1% per month, up to 36 months before full retirement age (20% max reduction). Claiming more than 36 months early reduces your benefit by 5/12 of 1% per month (10% max additional reduction).

For example, a person whose full retirement age is 67 would see their benefit reduced by 25% if they claimed at age 63.  

Again, delaying beyond full retirement age has the opposite effect. Your benefit increases by 0.66% for every month you delay Social Security until age 70. Depending on your birth year, delaying until age 70 will increase your benefit between 24% and 32%.

4. Applying COLAs

The SSA also makes annual Cost of Living Adjustments (COLAs) designed to protect the purchasing power of benefits from inflation. Since the first COLA in 1975, benefits have increased by an average of 3.7% per year. The SSA increased benefits by 2.5% between 2024 and 2025.

Are Social Security Benefits Taxable?

Taxes are an important element of financial planning, and that doesn’t stop in retirement. Up to 85% of your Social Security benefits are potentially taxable. Whether you end up owing income tax on your payments depends on your benefit amount and how much other income you have.

To calculate the taxable portion of your benefits, you’ll start by determining your “combined income.” Add half your annual benefit to your adjusted gross income (AGI) and any non-taxable interest earned during the year.

For single filers, heads of household and married couples filing separately, up to 50% of your benefits are taxable if your combined income is more than $25,000 but less than $34,000. You’ll pay taxes on up to 85% of your benefits if your combined income exceeds $34,000.  

For married couples filing jointly, the same percentages apply to slightly higher income thresholds. Up to 50% of benefits are taxable if your combined income is between $32,000 and $44,000. Up to 85% is taxable if combined income exceeds $44,000.

For example, imagine that you and your spouse collect $40,000 in Social Security, and have $52,000 in other income sources. As a result, your combined income is $72,000.

Because this exceeds the $44,000 threshold for joint filers, up to 85% of your benefits may be taxable. Using IRS formulas, this results in $34,000 of your benefits being included in their taxable income ($40,000 x 0.85).

Assuming you and your spouse fall in the 22% tax bracket, you would owe approximately $7,480 in federal tax on your Social Security benefits.

How Is Social Security Funded?

Payroll tax is the primary source of funding for Social Security benefits. Under the Federal Insurance Contributions Act (FICA), these taxes are a 15.3% levy that fund both Social Security and Medicare.

Employees and employers split these taxes, each paying 6.2% toward Social Security and 1.45% toward Medicare. (A 0.9% surcharge applies to wages over $200,000 for single filers and $250,000 for married couples filing jointly).

Not all income is subject to the Social Security tax, though. The 6.2% tax rate only applies to the first $176,100 in 2025 (up from $168,600 in 2024) in earnings, according to the SSA. For example, if you earn $200,000 in 2025, $23,900 won’t be subject to the tax. However, there is no wage limit for the Medicare tax.

This tax revenue is paid into the Old-Age and Survivors Insurance (OASI) and the Disability Insurance (DI) trust funds, which in turn pay benefits to retirees, survivors and the disabled. However, the trust funds are another source of funding. The SSA invests any money not needed to pay benefits each year in Treasury bonds, which generate interest within the funds.

Will Social Security Run Out?

Social Security is primarily funded through the payroll tax paid by today’s workforce. These taxes cover most benefit payments, and when there’s a shortfall, the program draws from its trust funds to make up the difference. As long as payroll tax continues to be collected, the program will keep paying benefits and it won’t run out of money entirely.

However, the trust funds continue to decline steadily, jeopardizing how much the program can pay out in the future. According to the Social Security and Medicare Boards of Trustees 2025 report, the OASI Trust Fund is projected to be exhausted by 2033. Without changes, payroll taxes would only cover about 77% of scheduled benefits. If combined with the DI Trust Fund, full benefits could be paid until 2035.  

To ensure the trust funds stay solvent, Congress could potentially generate more tax revenue by increasing the payroll tax rate. Legislators could also raise or do away with the current cap on earnings that are subject to payroll tax. Raising the full retirement age, from 67 to 70 for instance, could also help the trust funds regain solvency.