How does the calculator estimate my retirement benefit payment?

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Social Security
Social Security Card with calculator and money

What does the AARP Social Security Calculator do?

The calculator provides you with an estimate of your Social Security benefits, based on your earnings history and your age. Our tool also helps you visualize what percentage of your daily expenses Social Security payments can cover, and how you can increase your benefits if you wait to apply. It also tells you how your retirement income will be affected if you continue to work after applying for your benefits.

How does the calculator estimate my retirement benefit payment?

Our simplified estimates are based on two main data points: your age and your average income. Your retirement benefit is based on how much you’ve earned during your lifetime from jobs where you paid Social Security taxes. Your monthly retirement benefit is calculated based on your highest 35 years of wages. You can get your wage history on the Social Security Administration (SSA) website.

Your benefit will also depend on how old you are when you apply. You can start receiving it at the minimum retirement age of 62, but your monthly payments will be higher if you wait until your full retirement age, which is 66 but gradually rises to 67 for people born in 1960 or later. If you can wait until age 70 to start receiving benefits, you will be receiving the maximum monthly payment. 

A single person born in 1960 with an average salary of $50,000, for example, would receive $1,349 a month if he or she retires at age 62—the earliest age for benefits. The same person would receive $1,927 if she waited until she was 67, her full retirement age. And if she waits until age 70, she would receive $2,389, the maximum benefit for people with that income. Payments will not increase if you decide to wait past age 70 to receive your benefits.

Your marital status may also be a factor in the number of your benefits. For example, if you got divorced after 10 years of marriage, you might be able to base your Social Security payments on your former spouse’s wages. This calculator estimates Social Security benefits for people who have never been married, married couples, and divorced people whose marriage lasted at least 10 years and have not remarried. Everyone else should use the calculator as if they were single.

If you are widowed, you may be eligible for survivor benefits. In most cases, you are entitled to benefits if you are at least 60 years old and were married for at least nine months before your spouse’s death. The calculator does not estimate survivor benefits for widows. For that and other cases, consult the website of the Social Security Administration.

Other factors that affect the number of your benefit payments include whether you have worked for state or local government for more than 10 years. Your Social Security payments may be reduced if, for example, you have made payments to the public employee retirement program.

Who can collect Social Security retirement benefits?

People who are at least 62 years old, and who have worked at least 10 combined years in jobs in which they paid Social Security taxes, are eligible to receive Social Security benefits. In many cases, spouses, widows, and divorcees can apply for Social Security retirement benefits based on a spouse’s or former spouse’s earnings history. Unmarried children age 18 or younger (age 19 or younger if they are students) may also receive survivor benefits. You must be a US citizen or legal resident to receive benefits.

How is Social Security funded?

Mostly through payroll taxes. The annual Social Security tax rate is 6.2% for the employer and 6.2% for the employee, for a total of 12.4%. If you are self-employed, you must pay the full amount (12.4%). The government collects Social Security taxes on wages up to $147,000 for 2022.

When should I start collecting Social Security?

In reality, when to start collecting Social Security is a personal decision. It depends on your age, your health, how much you spend, and how much you have saved. Generally, it’s best to start receiving benefits as late as possible, as you receive a higher monthly payment that is adjusted annually for inflation.

Take, for example, a retired person who was born in 1950 and who averaged $50,000 a year in wages. If he has $3,000 a month in expenses, his Social Security check will cover 48% of his expenses if he started receiving benefits at age 62. If she had waited until her 70th birthday, his check would cover 85% of her expenses. Each year a person postpones retirement, their Social Security benefit—which is adjusted annually for inflation—will increase by about $1,649.

Traditionally, the retirement system in the United States has been like a three-legged stool: Social Security, savings, and pensions. Social Security was never intended to be the only source of income in retirement. Increasingly, however, employers have been moving away from employer-subsidized pension plans in favor of tax-deferred retirement savings accounts, such as 401(k) plans.

Can I use the calculator to estimate Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)?

No. SSDI is for people who are unable to work because of a medical problem that is expected to last a year or more or result in death. Your SSDI benefits will last only as long as you have significant medical impairment, as long as you have no other significant income.

SSI is a separate program for people with little or no income or assets and who are age 65 or older, as well as for people of any age, including children, who are blind or have disabilities. The maximum monthly SSI payment for 2022 is $841 for a single person and $1,261 for a couple. But some states add to those payments and you may receive less than the maximum if you or your family have other income. Learn more about SSDI and SSI through the Social Security Administration.