For one decade short of a century now, the Social Security program has been allowing seniors in retirement to rest easy knowing that they will have a stable source of income. During your working career, you will pay a percentage of your earnings into the dedicated Social Security payroll tax which you will later claim as benefit income once you retire and reach the eligible age.
The primary deciding factor of how much your monthly benefit checks will amount to is your salary during your 35 highest earning working years. This, however, is not the sole factor taken into consideration when you first claim from the Social Security Administration (SSA). In short, what you put in is what you get out, however, there are various situational factors that could either increase or decrease your benefits once you retire and begin claiming. Here is what you need to know — particularly if you claimed early.
How are Social Security benefits determined?
In order to be able to claim benefits from the Social Security program when you retire, you will have to pay 12.4% of your earnings into the dedicated Social Security payroll tax. In actuality, a worker will usually only contribute 6.2% of their earnings towards the payroll tax while the employer covers the remaining 6.2%. It is also worth noting that the program has a wage cap in place which means that only income below a certain threshold is considered for the Social Security payroll tax. In 2025, the wage cap is $176,100, however this limit is projected to increase in the new year.
It is also recommended to have worked for at least 35 years because your income for 35 of your highest earning years are used in the benefit calculation formula. This is recommended because if, for instance, you have worked only for 30 years, there will be 5 years where you have $0 as your income which will bring down your benefit amount.
Claiming early vs. late
Another important factor to consider when planning your retirement is the age at which you claim as this could determine whether your benefits are increased or decreased. This is because of the Full retirement Age that the agency has put in place. while Social Security can be claimed starting at age 62, this will be considered as claiming early and as a result, your benefits could face a deduction of up to 30%.
If you claim at your Full Retirement Age, however, you will qualify to receive 100% of the benefits you are entitled to relative to your income when you worked. According to the 1983 amendments, the Full Retirement Age was slated to gradually increase in two month increments until it reaches 67 years. In 2025, the Full Retirement Age moved up to 66 years and 10 months for those born in 1959. In 2026, it will be 67 years of age for those born in 1960 and later and will no longer increase from there unless Congress decides to extend it further.
If you delay claiming until you are 70, you will earn delayed retirement credits and as a result, you will receive a notably higher benefit amount. In 2025, the average benefit check is about $2,000, but the maximum Social Security checks stands at $5,108 and in order to qualify for this, you will need to delay claiming, along with several other requirements.
If you have claimed early but have since changed your mind, there are options available to you. If you are still within the first 12 months of claiming and you have not reached FRA, you can withdraw your application. You will, however, need to repay the benefits you had received during this time. This is a good option for those who claimed early for whatever reason they deemed necessary at the time but have since changed their mind due to returning to work or any other reason.