Most retirees will depend on Social Security to some extent throughout their senior years. In fact, a whopping 88% of current retirees say their benefits are either a "major" or "minor" source of income, according to a 2024 poll from Gallup.
The more you'll be relying on your benefits to make ends meet, the more important it is to maximize those monthly checks.
It's simpler than you might think to make the most of Social Security, but first you'll need to know the basics of how your benefits are calculated. There are five primary factors influencing your benefit amount, but only 4% of U.S. adults can name all of them, according to a 2024 survey from the Nationwide Retirement Institute.
Whether you're nearing retirement age or still have years to go, knowing these five factors can help you squeeze every penny out of Social Security.
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1. The length of your career
In general, you'll need to have worked and paid Social Security taxes for at least 10 years to qualify for retirement benefits. But the longer you work, the more you can potentially earn.
Your benefit amount is based on your wages throughout the 35 years you earned the most. Those earnings are averaged, run through a formula, and adjusted for inflation. By working for fewer than 35 full years, you'll have zeros in your average -- which will reduce your benefit.
2. Your career earnings
The more you earn, the higher your benefit will be -- up to a certain limit. Only your wages earned during your 35 highest-earning years count toward your benefit, but also, only income up to the annual wage limit will affect your benefit amount.
The wage limit is the highest income subject to Social Security taxes. Once you surpass that limit, that income won't increase your payments. This limit changes from year to year to account for cost-of-living changes, but in 2024, it's $168,600 per year.
3. Your birth year
The year you were born will determine your full retirement age , which is the age at which you'll receive 100% of your benefit based on your career earnings.
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If you were born in 1960 or later, your full retirement age is 67 years old. Those born before 1960 will have a full retirement age of either 66 or 66 and a few months, depending on the exact birth year. To receive your full benefit amount, you'll need to wait until this age to begin claiming.
4. The age you begin taking benefits
While claiming at your full retirement age will earn you your full benefit amount, you don't have to file at that age. You can begin taking benefits as early as age 62, or you can wait a few years. Delay until age 70, and you'll receive the maximum possible monthly payments.
Your claiming age will have a major impact on your benefit amount. By filing as early as possible at age 62, your benefit will be permanently reduced by up to 30%. If you delay until age 70, though, you'll collect your full benefit plus a bonus of between 24% and 32% per month, depending on your full retirement age.
5. Your marital status
If you're married, divorced, or widowed, you could be entitled to extra benefits each month in the form of spousal, divorce, or survivors benefits , respectively.
With spousal and divorce benefits, the maximum payment is 50% of your spouse's or ex-spouse's full benefit amount -- or the amount they'll receive at their full retirement age. If you qualify for survivors benefits, you could collect the entire benefit your spouse was receiving before they passed.
Keep in mind, though, that if you also qualify for retirement benefits based on your own work history, you'll only receive the higher of the two amounts. For example, if you're currently collecting $800 per month in retirement benefits and also qualify for $1,000 per month in divorce benefits, your total benefit would be $1,000 per month -- not $1,800 per month.
Social Security is an invaluable resource for millions of older adults. Regardless of how much you expect to depend on your benefits, knowing the factors that affect your benefit amount can make retirement planning far easier.
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