Social Security Retirement Benefits

Social Security retirement benefits provide a safety net of income replacement for retirees and their qualifying family members.

The Social Security Administration accounts for inflation with annual cost-of-living adjustments, or COLAs. In 2025, Social Security retirement benefits will increase by 2.5%.

If your ex-spouse, current spouse or child meets specific qualifications, they could receive a monthly payment of up to one-half of your retirement benefit amount. This additional payment does not affect your own retirement benefit amount.

Think of these benefits as a part of your retirement plan — you shouldn’t rely on Social Security benefits alone.

If you’re 62 or older and have at least 40 credits, you qualify for retirement benefits.

You earn credits by working and paying your Social Security taxes. In 2025, you earn one credit for every $1,810 in covered earnings, according to the Social Security Administration. You can earn up to four credits in one year.

Forty credits typically equate to about 10 years of working. If you haven’t worked long enough to qualify, your spouse’s work history can qualify you for retirement benefits.

Generally, two main factors affect how your Social Security benefits are calculated: your lifetime earnings and your age when you start to receive benefits.

“The SSA uses a formula that calculates the average of an individual’s highest 35 years of earning, indexed for inflation,” Andrew Lokenauth, Founder of Fluent in Finance told RetireGuide. ”With retirement benefits, your benefit amount will be lowered if you choose to start receiving benefits before you reach your full retirement age.”

Additionally, Social Security benefits are progressive, which means lower-income workers receive a larger percentage of their pre-retirement income than higher-income workers, Lokenauth said.

Social Security benefits are taxable. However, this doesn’t mean you’re guaranteed to have to pay taxes on your benefits.

How you file your taxes and your income influence whether your Social Security benefits are taxable.

You may have to pay taxes on your benefits if your total income is more than $25,000 and you file a federal tax return as an “individual.” If you file a joint return, you may have to pay taxes if your combined total income with your spouse is more than $32,000.

Depending on your income, you may have to pay taxes on 50% to 85% of your Social Security income.

*Combined income includes the total of your adjusted gross income, your non-taxable interest as well as half of any Social Security benefits that you receive for the year.

Your Social Security retirement benefits are paid out monthly. You can receive your benefits through direct deposit or sign up for the Direct Express card program.

Your Social Security payment schedule varies, depending on what day you were born. For example, if you were born in the first 10 days of a month, you can expect to receive your benefit payment on the second Wednesday of each month. 

According to the Social Security Administration, you can expect benefits to increase by about $50, due to the 2025 COLA increase of 2.5%.

The Social Security Administration also offers a chart showing retirement benefit calculation examples for workers retiring in 2025. There are examples for potential benefit amounts if you retire before or at your full retirement age.

To maximize your monthly benefits, wait until you’re 70 years old, or at least until you reach full retirement age, to start collecting payments. Although you can start to claim your benefits once you turn 62, the benefits will be 30% to 35% less than if you were to wait until you reached your full retirement age.

If you wait until past your full retirement age to start collecting Social Security benefits, your monthly benefits will increase by 8% every year until you’re 70. If you want the highest benefit amount possible, wait to collect your Social Security benefits until you turn 70.

For example, if you were born in 1959, your full retirement age would be 66 years and 10 months. Let’s say you’re entitled to $1,000 a month at full retirement age. The amount you can receive varies by hundreds of dollars a month based on when you choose to retire.

If you were to choose an early retirement at 62, you would receive only $708 per month. If you were to wait until you reach your full retirement age at age 66 and 10 months,  you would receive the full $1,000. However, you’d receive the highest benefit of $1,253 per month if you were to delay retirement until you turn 70.

The decision of when to begin claiming Social Security benefits is an extremely important part of your retirement plan. It determines how much Social Security you will receive every month for your entire time in the program.

Before you decide when to apply for Social Security benefits, consider what other retirement savings or benefits you have available to you, how long you expect to live in retirement and whether you plan to continue to work while you collect Social Security.

You can continue working and start receiving Social Security benefits to maximize your benefit amount. Know that if you start to receive benefits before you reach your full retirement age, there is a limit on how much you can earn.

Three of the biggest Social Security mistakes you can make are collecting benefits too early, assuming you only need Social Security as your income and not checking your earnings record. 

If you start collecting your benefits when you turn 62, you’ll be shorting yourself of potential income. Below is an example of a personalized monthly retirement benefit estimate, which will be in your Social Security statement.

You can access your statement online, or have it mailed to you. The statement will show potential benefit amounts, personalized to you, to show how much you could make if you wait until you turn 70.

Social Security benefits are likely to cover only about 37% of past income, according to the Center on Budget and Policy Priorities. If you rely only on Social Security and don’t have other savings or resources to fund your retirement, you’re likely to struggle to be financially comfortable. 

Your earnings record is what qualifies you for Social Security retirement benefits. If you don’t have enough work credits, or you don’t pay Social Security taxes, you could find yourself at risk of not qualifying for benefits. Confirm that you’re on track to qualify for benefits so you don’t end up risking ineligibility.

If you had any earnings within the previous year, the Social Security Administration will recalculate your benefits. Benefits are recalculated annually, according to AARP.

Your benefit amount will only change if your latest income was one of your highest. Your benefits are calculated from the 35 best paying years of income. If your earnings from the previous year weren’t high compared to previous years, your benefit amount shouldn’t be affected.

Writer Anna Baluch contributed to this article.