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How Social Security Benefits Are Calculated
Early Retirement vs Full Retirement vs Delayed
Social Security Bend Points Explained
Strategies to Maximize Your Social Security
Frequently Asked Questions
Benefits are based on your highest 35 years of earnings, adjusted for inflation (AIME). The Primary Insurance Amount (PIA) is calculated using bend points: 90% of the first $1,174/month, 32% of the next $5,904, and 15% above that. Claiming before or after full retirement age adjusts this amount.
Claiming at 62 instead of the full retirement age (67 for most people) reduces your benefit by about 30%. Each month before full retirement age reduces your benefit by approximately 0.56% (6.7% per year for the first 3 years, 5% per year beyond that).
Delaying past full retirement age earns 8% per year in delayed retirement credits, up to age 70. If your full benefit at 67 is $2,500/month, waiting until 70 increases it to about $3,100/month — a permanent 24% increase.
The Social Security trust fund is projected to be depleted around 2034, at which point payroll taxes would still cover about 77% of scheduled benefits. Congress will likely make adjustments (raising taxes, adjusting benefits, or raising retirement age) before that point.