Social Security
A government benefit based on your earnings history, with the amount set by when you claim.
The benefit is calculated from your highest 35 years of indexed earnings. Fewer than 35 years of work means zeros enter the average, which is why an additional working year late in a career can raise the figure by replacing one. The average retired-worker benefit was just under $2,000 a month in 2025.
Claiming age changes the amount permanently. At a full retirement age of 67, claiming at 62 reduces the benefit by 30%, and each year deferred past 67 adds 8% until 70, for a maximum increase of 24%. The increase is a percentage of the primary insurance amount rather than compounding.
Two features distinguish it from a portfolio. It is indexed to inflation annually, and it continues for life regardless of how long that is, which makes it the main hedge against longevity risk most households hold. It replaces roughly 40% of pre-retirement income for a median earner, with the replacement rate falling as earnings rise.
Worked through
Social Security Claiming Age Impact
| Claiming Age | Monthly Benefit |
|---|---|
| Age 62 | $1,330 (30% reduction) |
| Age 65 | $1,647 (13.3% reduction) |
| Age 67 | $1,900 (full retirement age) |
| Age 70 | $2,356 (24% increase) |
Where this lives in Promi
Investing page. Retirement projections take Social Security as an input.
Related in Retirement Planning
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