How Are Social Security Benefits Calculated?

Before you head off to the beach, be sure to study up so you know what to expect, or, if you have some time left before your golden years, understanding the system could net you an increased monthly payment.

What Are Social Security Benefits?

Everybody working in the United States pays a percentage of their income toward the Social Security program to ensure their financial stability during retirement. At the age of 65, many Americans choose to retire and pay their expenses with savings. Social Security is a supplement to those savings, providing further flexibility to our nation’s elderly.

How Can I Alter My Monthly Social Security Benefits?

The United States Government lists four ways in which you may reduce or delay reduction of your monthly benefits on an electronic fact sheet. The first and most obvious way that you might prematurely reduce your social security benefits is by choosing to retire early, as soon as age 62, though you will receive benefits at a reduced rate. Also beginning at age 62 is the option to receive cost-of-living increases which are not deducted from your monthly payments. In today’s economy, these may be especially necessary.

Can I Increase My Monthly Social Security Benefits?

If you choose not to retire until after the full retirement age of 65, your monthly benefits will be increased up until age 70, and, if you are a government worker with a pension that does not include taxes for social security benefits, a different formula is applied to your monthly earnings.

How Can I Estimate My Monthly Social Security Benefits?

Specific details for estimating as well as a convenient calculator may be found in the electronic fact sheet at

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