Social Security Benefits Calculator

Social Security pays a monthly retirement benefit based on your lifetime earnings. Created by the Social Security Act of 1935 during the Great Depression, it remains the single largest source of retirement income for most Americans — a "replace our own wages" pension funded by payroll taxes on workers. The benefit is a Primary Insurance Amount (PIA), computed from your Average Indexed Monthly Earnings (AIME) using a progressive formula.

Step 1 — AIME

Take your 35 highest-earning years, adjust each year's wages for average wage growth, and divide by 420 months. That is your AIME. Zeroes fill in if you worked fewer than 35 years — which is why it usually pays to keep working past 35 years of covered earnings: each extra year replaces a zero and lifts AIME.

Step 2 — the bend-point formula (2025)

PIA = 90% × first part + 32% × second part + 15% × the rest

First bend point:   $1,226
Second bend point:  $7,392

For an AIME of $5,000:

90% × 1,226        = $1,103.40
32% × (5,000 − 1,226) = $1,207.68
PIA                = $2,311.08/month

That works out to about $27,733 a year — a large fraction of a $5,000 monthly working income replaced in retirement.

Why it is progressive

Low earners get a 90% replacement on their first dollars; high earners only 15% on the amount above the second bend point. Social Security deliberately replaces a larger share of income for lower earners, which is why two workers with very different pre-retirement incomes end up with fairly similar benefits.

Adjusting your benefit

• Early (age 62) — up to ~30% less than PIA, and the reduction is permanent (not just until full retirement age).
• Full retirement age (67 for most) — exactly PIA.
• Delayed (up to 70) — ~8% more per year past full retirement age, adding up to a roughly 24% boost for waiting those three years.

Claiming strategy is a lifetime financial decision: for most people drawing benefits to age 85+, delaying to 70 produces more total lifetime income, but claiming at 62 makes sense when health isn't robust or money is needed now. This calculator models the PIA; governments update the bend-point numbers annually for wage growth, so re-run estimates each year.

Two more truths about Social Security

• A cost-of-living adjustment (COLA) is applied to benefits most years, so the real purchasing power of benefits has generally been protected since the 1970s — rare among pensions worldwide.
• Benefits can be taxed. Depending on your combined income, up to 85% of Social Security benefits can become taxable for higher earners — the MAGI calculator is the right companion for that planning.

This is an estimate using standard bend points. Use your actual earnings record at ssa.gov for a precise number.