Social Security retirement benefits play a crucial role for both retired workers and their spouses, even if the spouse has never worked. While both types of benefits are available at age 62, there are key differences in how they are calculated and what you can expect.
Let’s break this down to make it easier for you to understand what benefits you or your spouse might be eligible for, and how these are determined.
Social Security Benefits for Retired Workers: How It’s Calculated?
Retired workers’ Social Security benefits are based on their lifetime earnings and the age at which they decide to claim benefits. The Social Security Administration (SSA) calculates these benefits when you turn 62, but adjustments are made over time to account for changes in inflation and income.
Here’s how your benefits are calculated in four easy steps:
| Step | Description |
|---|---|
| Step 1 | Your earnings are adjusted for inflation to ensure that your benefits reflect the changes in living costs during your working years. |
| Step 2 | The SSA calculates your Average Indexed Monthly Earnings (AIME) based on your 35 highest-paid years. This gives a monthly average. |
| Step 3 | The AIME is used to determine your Primary Insurance Amount (PIA), which is the amount you would receive if you claimed benefits at your Full Retirement Age (FRA). |
| Step 4 | Your PIA is then adjusted if you claim Social Security before or after your FRA. If you claim before, you get less than 100% of your PIA; if you wait until after, you can receive more than 100% of your PIA. |
There are two limits to this adjustment process:
- You can’t claim benefits before age 62.
- If you delay your benefits past age 70, no further credits will be added to your benefit amount, so it’s a good idea to claim by then.
Birth Year and Full Retirement Age (FRA)
Your birth year determines your FRA, which affects how much of your PIA you receive if you claim early or late. Here’s a quick chart to explain:
| Birth Year | Full Retirement Age | Benefit at Age 62 | Benefit at Age 70 |
|---|---|---|---|
| 1943-1954 | 66 | 75% | 132% |
| 1955 | 66 and 2 months | 74.2% | 130.6% |
| 1956 | 66 and 4 months | 73.3% | 129.3% |
| 1957 | 66 and 6 months | 72.5% | 128% |
| 1958 | 66 and 8 months | 71.7% | 126.6% |
| 1959 | 66 and 10 months | 70.8% | 125.3% |
| 1960 and later | 67 | 70% | 124% |
The average monthly benefit for retired workers in June 2024 was $1,918.28, which adds up to $23,019.36 per year. However, this number can vary based on individual work history and when you decide to claim your benefits. To get a more personalized estimate of your future benefit, it’s recommended to create a my Social Security account with the SSA.
Social Security Benefits for Spouses: What You Should Know?
If you’ve never worked but your spouse has, you might still be eligible for Social Security benefits through your spouse’s work record. To qualify, you must meet these three conditions:
- You need to have been married for at least one year.
- You must be at least 62 years old.
- Your spouse must already be receiving Social Security benefits.
In some cases, even divorced spouses may be eligible, provided the marriage lasted at least 10 years and they haven’t remarried.
When a spouse claims Social Security benefits, their payout depends on two factors: their spouse’s lifetime earnings and their own claiming age. If the spouse claims at their FRA, they will receive 50% of their partner’s PIA.
However, if they claim before FRA, they receive less than 50%. Unlike retired workers, spouses do not receive additional benefits if they delay claiming past their FRA.
Spousal Benefit Reduction
For spouses who claim benefits early, here’s a chart showing the smallest possible payout, based on birth year:
| Birth Year | Full Retirement Age | Benefit at Age 62 |
|---|---|---|
| 1943-1954 | 66 | 35% |
| 1955 | 66 and 2 months | 34.5% |
| 1956 | 66 and 4 months | 34.1% |
| 1957 | 66 and 6 months | 33.7% |
| 1958 | 66 and 8 months | 33.3% |
| 1959 | 66 and 10 months | 32.9% |
| 1960 and later | 67 | 32.5% |
In June 2024, the average monthly spousal benefit was $910.95, or $10,931.40 per year. To estimate what you might receive, check your partner’s PIA in the “Plan for Retirement” section of their my Social Security account.
Related News:
- Disability Benefits Boost: SSDI Payments to Rise in 2025 – How Much Will You Get?
- Social Security Benefits Are Changing – Find Out How It Affects You?
Summary
Whether you’re a retired worker or a spouse, knowing how Social Security benefits are calculated and the factors that affect them is key to making informed decisions about your future. Remember, the best way to get an accurate prediction of your benefits is to check your personalized estimate on the SSA’s website.
Eliot Pierce is a dedicated writer for ChiefsFocus.com, covering local crime and finance news. With a keen eye for detail and a passion for storytelling, Eliot aims to provide his readers with clear and insightful analysis, helping them navigate the complexities of their financial lives while staying informed about important local events. His commitment to delivering accurate and engaging content makes him a valuable resource for the community.
