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What 9 Factors Impact the Size of Your Social Security Check?

POSTED ON: November 29, 2022

Many retirees rely greatly on their monthly Social Security checks, so it’s essential to understand what affects the size of your Social Security check. This article on explains the “9 Factors That Impact the Size of Your Social Security Check.”

1. Your work history

Many older people think that when they stop working, they are officially retired. However, the Social Security Administration (SSA) considers your retirement age to be when you start taking Social Security benefits. The amount of your monthly check is based on your 35 highest-earning years and when you start getting Social security benefits.

2. Your earning history

The amount you earned in those 35 highest-earning years affects the size of your monthly Social Security check. If you didn’t earn money for each of those 35 years, a $0 will be entered for each year you didn’t earn money.

3.  The year you were born

  • For people born between 1943-1954, 66 is the full retirement age.
  • For people born between1955-1960, this chart will guide you to your full retirement age.
  • For people born in 1960 or later, your full retirement age is 67.

4. Your age when you claim Social Security

The age you claim Social Security can affect the size of your Social Security check. Retirees can claim Social Security benefits at age 62. However, claiming sooner than the ages listed above will permanently lower your monthly benefit amount, so you can’t earn the full amount due to you. If you wait longer than your full retirement age, Social Security retirement benefits will increase by a certain percentage for each month you delayed starting your benefits.

This increase stops when you reach age 70. Here’s SSA’s chart for the details.

5. If you have a spouse who worked

If you’re at least 62, you have a spouse who worked, earned more than you did, and is receiving benefits, you might be able to get a higher amount paid to you, depending on the age your spouse was when they claimed Social Security. If you wait until your full retirement age, this benefit increases. You can learn more about Social Security benefits for spouses.

6. The economy

Your monthly Social Security check is typically a fixed amount. However, there’s a law that tries to compensate people for inflation with automatic cost-of-living adjustments (COLA). These COLAs are based on the national rate of inflation.

7. If you keep working

If you start collecting benefits and keep working, your benefit amount will be updated annually to include your new earnings. However, if you’re not at full retirement age, if you earn too much at your job you could temporarily lower your benefit amount. You can test scenarios on this calculator. More information can also be found in he SSA’s “Receiving Benefits While Working” page.

8. Other income

The amount of tax you may have to pay on your Social Security benefit, depends on other income you have and how you file your federal taxes. If you file as an individual and your annual income is under $25K, or if you’re a couple filing together and your income is under $32K, you won’t pay any federal income tax on your benefit checks. In any other scenario, your Social Security benefit will be taxed on up to 50-85% of the total amount.

9. Where you live

If you live in a state that taxes Social Security benefits, you may owe state income tax on your benefit. The good news: Social Security benefits are not taxed by Massachusetts.