The average 65-year-old today will live to age 85, and one out of every three 65-year-olds will live past age 90, according to the Social Security Administration (SSA). That equates to living an average of 20 years after the full retirement age on retirement savings and Social Security. So how much income can workers anticipate receiving from Social Security when they retire?
What Is Social Security and Its Role as Income During Retirement?
The Social Security Act was signed by President Franklin D. Roosevelt on August 14, 1935 and is celebrating its 90th anniversary this year. The act was designed to improve the financial state of workers by paying retired workers age 65 or older an income after retirement. The funding for the program was to come from workers themselves through contributions during their working years. Social Security was originally designed to replace at most 50% of preretirement wages for those who retire at the full retirement age (FRA).
How Do Workers Qualify to Receive Benefits?
Not all employees work in jobs covered by Social Security. Most federal employees hired before 1984, and employees of some state and local governments that chose not to participate in Social Security, are in non-covered work.
Working in jobs covered by Social Security earns “credits of coverage.” As a rule of thumb, one credit is needed for each year after age 21 up to the year of age 62, death or disability to qualify for Social Security. It does not matter when the credits are earned. In 2025, one credit is earned for every $1,810 in income with a maximum of four credits earned per calendar year.
A person may also qualify for benefits through their spouse or ex-spouse.
- When the qualifying spouse retires, the non-qualified spouse will receive a benefit equal to a percentage of the worker’s benefit.
- An eligible divorced spouse age 62 or older whose marriage lasted ten years or longer may be eligible for benefits based on the earnings of the ex-spouse.
- Survivor benefits may be paid to spouses, children and parents if the deceased qualifies for Social Security and had earned credits in six of the 13 calendar quarters prior to death.
How Much Income Can a Worker Receive?
The amount of Social Security income is based on lifetime earnings, the age at the time of retirement and the qualifying method. The average monthly payment for retired workers is currently about $2,000, according to the SSA. The age at which individuals start receiving retirement benefits is a personal choice, but it can be influenced by circumstances beyond their control, such as personal health issues, caregiving responsibilities or workplace changes.
- Depending on the year of birth, the full retirement age (FRA) to receive full benefits is currently between the ages of 66 and 67.
- A worker can begin receiving Social Security income as early as age 62 but will receive a permanent reduction up to 30%.
- If benefits are delayed past the FRA and up to age 70, workers can earn credits that increase their monthly benefit by about 8% for each year receipt is delayed.
How Can Employers Assist Their Workers?
- Educate workers about Social Security and its role in retirement income relative to other sources of retirement income, like employer retirement plans or personal savings.
- Remind workers to check their W-2 statements yearly to ensure their name and social security number are correct.
- Encourage workers to check their eligibility for benefits, obtain a benefits estimate, and view earnings records using the Social Security website.
- Inform workers to contact Social Security at least three months prior to their retirement date and prior to age 65 for Medicare benefits.
Nearly two-thirds of workers (65 percent) shared that preparing for retirement makes them feel stressed (EBRI.) Employers can help ease that stress by educating workers about the role Social Security benefits may play in their retirement income, along with retirement savings options available from their employer.
Resources:
Ready or Not: Your Retirement Planning Guide, Chapter 3: Social Security, International Foundation
Retirement Information for Medicare Beneficiaries, SSA
Prepare for Social Security Benefits, SSA
Monthly Statistical Snapshot, SSA
2025 Retirement Confidence Survey, EBRI
Financial Literacy/Retirement Planning InfoQuick
Financial Education/Retirement Security Toolkit (U.S.)
Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.
