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Do you know what affects your Social Security benefit amount?

While Social Security can be a valuable part of retirement planning, these benefits were never designed to be the only source of income. However, it is expected to contribute thousands 鈥� even hundreds of thousands 鈥� of dollars over the course of your retirement. While you likely understand its significance, it鈥檚 important to ensure you鈥檙e fully informed about what to expect from your Social Security benefits as you plan for the future. 

There are several factors that can impact the amount you can expect to receive, but you will not know the exact amount until you actually file.

5 factors that can impact Social Security benefits

1. Earnings and the primary insurance amount (PIA)

Your benefit amount is primarily determined by your . This may sound straightforward, but the Social Security Administration (SSA) considers the 35 highest-earning years, adjusts them for inflation, and applies a complex formula to arrive at your primary insurance amount. You can plan to receive this expected benefit at full retirement age (FRA), which currently falls between ages 66 and 67 depending on your birth year. Your benefit cannot exceed the (as adjusted annually for inflation).

However, even after claiming Social Security benefits, you can help boost your benefit amount by working, if your current earnings are at least high enough to replace the lowest earnings number used in the .

2. Filing age

While earnings determine the PIA, this only represents the amount you will receive if you claim benefits at FRA. early (as early as age 62) typically results in a decreased benefit amount. Delaying past FRA can increase your benefit by 8 percent per year up to age 70. The Social Security Administration designed the reduction for to provide essentially the same total benefit as a retiree would have received filing at FRA, just in smaller amounts over more years. 

However, the longer you live, the greater the impact you can enjoy from any increases you receive by waiting to file. You should therefore consider your financial situation, health and retirement goals before deciding when to claim Social Security benefits. 

3. Inflation adjustments

Once you begin claiming Social Security benefits, the amount is generally permanent. However, Social Security benefits are often adjusted for inflation each year through a cost-of-living adjustment (COLA). This adjustment increases your benefit amount to help it keep pace with the rising cost of living. In 2025, the increase was .

4. Tax on benefits

About of Social Security recipients pay income tax on a portion of their benefits. Benefits become taxable based on other sources of income 鈥� wages, pension, withdrawals from retirement accounts and investment income (including tax-exempt interest on municipal bonds). To determine whether benefits are , take your total income from the sources above and add half your benefit amount.

• If the total is greater than $32,000 (joint) or $25,000 (single), up to 50 percent of the benefit is taxable.
• If the total is greater than $44,000 (joint) or $34,000 (single), up to 85 percent of the benefit is taxable.

This applies to federal taxes, but states may also tax Social Security benefits. Therefore, it鈥檚 important to consider the impact of federal and state taxation when making decisions about continued employment. 

5. Employment

If you file early (before FRA) and continue to work, your benefit may be temporarily reduced based on your earnings. However, once you reach FRA, earnings of any amount will no longer reduce your benefits. In fact, the SSA will recalculate your , giving credit for any amounts previously reduced or withheld due to excess earnings.

An estimated benefit amount

A good first step is to create a account on the Social Security Administration website. You can verify your official earnings history and use the SSA calculator to get a rough estimate of your expected benefit at full retirement age.

Talking to your financial professional can also be helpful in determining what factors can impact this estimated benefit amount and help guide you through important decisions related to filing age and continued employment. Your estimated benefit amount can also be useful information when considering future retirement income and determining if there may be anticipated gaps between retirement income and expenses. Your financial professional can suggest potential options for helping fill that income gap, like a fixed indexed annuity, and work with you to develop a strategy that aligns with your retirement goals and timeline. 

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