You are nearing retirement age and want to know how much you might receive each month in Social Security benefits once you leave the workforce.
The amount of your monthly benefit depends mainly on how much you earned while working, how long you worked, and when you choose to begin claiming benefits. The Social Security Administration (SSA) uses specific formulas to calculate your benefit, and the timing of your retirement can significantly affect the monthly amount.
Here is a closer look at what goes into determining your Social Security benefit for people planning around 2026 and beyond:
Your Income
When the SSA calculates your monthly benefit, it considers your 35 highest-earning years. These are the years in which you earned the most income that was subject to Social Security payroll taxes. The earnings in each of those years are adjusted to reflect changes in national wage levels before they are averaged to determine your benefit amount. This process ensures your benefit reflects your earnings at today’s wage levels.
Not all of your income is counted when determining your benefit. For 2026, only earnings up to the taxable maximum of $184,500 are used. Any earnings above $184,500 in a year do not increase your Social Security benefit.
If you choose to work while receiving benefits before you reach your full retirement age, the SSA has an earnings limit. In 2026, you may earn up to $24,480 before your benefits are reduced for excess earnings. If you reach full retirement age during the year, a different limit ($65,160 in 2026) applies for the months before you reach that age. Any benefits withheld due to excess earnings are added back into your benefit once you reach full retirement age.
How Benefits Are Calculated
After indexing your earnings for wage growth, the SSA calculates your averaged indexed monthly earnings. This figure is used in a formula to determine your Primary Insurance Amount (PIA). Your PIA is the base amount of your monthly Social Security benefit if you claim at your full retirement age. The formula is designed to be progressive, meaning that lower-wage workers receive a higher percentage of their past earnings as benefits than higher-wage workers receive.
Retirement Age
The age at which you begin claiming Social Security has a major impact on your monthly benefit amount. You can begin receiving benefits as early as age 62, but claiming early means a lower monthly benefit because you are expected to receive benefits for more years.
Full retirement age varies by birth year, but for many people retiring around 2026, it is between age 66 and age 67. If you wait until your full retirement age to begin benefits, you receive your full PIA.
Delaying benefits past full retirement age up to age 70 increases your monthly benefit because the SSA credits you for postponing your claim. The maximum possible monthly benefit increases for people who delay until age 70. In 2026, the maximum monthly Social Security benefit at full retirement age is $4,152, and delaying benefits until age 70 could increase that amount to $5,181. Starting benefits at age 62 in 2026 results in a lower amount, for example, $2,969, for someone eligible for the maximum benefit.
Deciding when to claim benefits depends on your individual situation. Some people find it makes sense to start benefits earlier because of health conditions or financial needs, while others choose to wait to increase their monthly income over time.
Monitoring Your Record
As you near retirement age, reviewing your Social Security earnings record can help ensure accuracy and give you an idea of what to expect. The SSA provides benefit statements that list your earnings history and show estimated monthly benefit amounts at different claiming ages depending on when you retire. You can access this information online by creating a my Social Security account.
Understanding how your earnings history and retirement age affect your benefit gives you more control over your financial planning as you prepare for retirement.