The first step in planning for retirement is knowing how much money you will receive from Social Security in the future. Social Security provides income in retirement and can also help people through disability and survivor benefits. Understanding your future Social Security benefits can help you plan your savings and investments more effectively. It can give you a better idea of ​​how much income you might have in retirement.
Social Security calculates your benefits based on your income and work history. To qualify for benefits, you must earn Social Security points. The number of credits you need depends on the type of benefit you apply for and the age at which you receive benefits.
How to check your Social Security benefit estimate
As Kiplinger’s report states, by 2026, workers will receive one Social Security credit for every $1,890 they earn. A maximum of four credits may be earned each year. To earn up to four credits in 2026, a person must earn at least $7,560 during the year. If Social Security taxes are due, wages and self-employment income will count toward these credits. A worker needs 40 lifetime points to qualify for retirement benefits. This usually means working for about 10 years.
As Kiplinger points out, while the Social Security Administration (SSA) provides benefit estimates, understanding the calculation process can help people check whether the estimates are accurate. SSA estimates may not always perfectly predict future benefits because they are based on current information and assumptions. Kiplinger said people can get a personalized estimate by downloading the SSA-7004 form from the SSA website. The table estimates benefits at age 62, full retirement age, and age 70.
A report from Kiplinger outlines six major steps to more accurately estimate Social Security benefits.
Step 1: Check your earnings history
According to the Kiplinger Report, to receive retirement benefits, a person must be age 62 or older and have paid Social Security taxes for 10 years or more. People who defer benefits until full retirement age (FRA) or age 70 will typically receive higher monthly payments. Social Security calculates benefits based on an individual’s average indexed monthly earnings (AIME) during their 35 highest earning years. The Social Security Administration keeps records of a person’s earnings each year they work. In 2026, Social Security taxes only apply to the first $184,500 of income. The limit is $8,400 higher than in 2025.
Step 2: Adjust income for inflation
Social Security adjusts past earnings using the Average Wage Index (AWI). This reflects how wages have grown over time across the country. This adjustment prevents older, lower wages from unfairly comparing to modern wages. Future Social Security payments also take into account inflation before retirement. According to Kiplinger’s report, the SSA provides index factors to help people adjust their income correctly. Users enter the year they turned 60 to find suitable factors.
Step 3: Calculate your average income
To calculate Average Index Monthly Earnings (AIME), add the earnings from the 35 highest earning years. If a person has worked for less than 35 years, all available income is included. Years with no earnings count as zero and reduce the final benefit amount. Kiplinger noted that after adding up the income, dividing the total by 420 months equals 35 years. The result is rounded down to the nearest dollar and becomes the worker’s AIME.
Step 4: Calculate your benefit amount
The Primary Insurance Amount (PIA) is the basic monthly benefit a person would receive at full retirement age. For 2026, the PIA calculation uses a special income threshold called the “inflection point.” This calculation includes 90% of the first $1,286 of AIME. It also includes 32% AIME, with prices ranging from $1,286 to $7,749. Any AIME over $7,749 will be multiplied by 15%. Adding these three quantities together determines the PIA. The final number is rounded down to the next lower multiple of 10 cents.
Step 5: Know your retirement age
Waiting until full retirement age often helps workers receive the maximum standard monthly benefit. People can claim benefits early, but their monthly payments will be permanently reduced. Workers who delay retirement beyond their FRA and continue working may be eligible for a delayed retirement credit. This increases monthly benefits.
According to the Kiplinger chart, the full retirement age for people born between 1943 and 1954 is 66 years. For someone born in 1955, FRA is 66 years and 2 months. For someone born in 1956, FRA is 66 years and 4 months. For someone born in 1957, FRA is 66 years and 6 months. For someone born in 1958, FRA is 66 years and 8 months. For someone born in 1959, FRA is 66 years and 10 months. For those born in 1960 or later, the FRA is 67 years.
A proposal to raise the full retirement age from 67 to 69 is still under debate. Kiplinger’s report states that people who receive benefits 36 months early will face a 1% reduction on 5/9 each month. Those who apply more than 36 months in advance will face an additional 1% reduction on 5/12 per month.
Step 6: Check Medicare Deductions
Medicare Part B premiums are automatically deducted from the Social Security checks of seniors enrolled in Medicare. Medicare Part B premiums in 2026 are $202.90 per month. That’s up from the 2025 premium of $185. People who are not enrolled in Medicare will not have this cost deducted from their Social Security benefits.
Key things to remember
A person usually needs at least 10 years of work experience to qualify for Social Security retirement benefits. Benefits are based primarily on a worker’s highest earning years. As Kiplinger said, the age a person begins receiving benefits can increase or decrease monthly payments.
When workers reach full retirement age, they receive 100% of their standard benefits. People can also use the Social Security calculator on their online Social Security account to estimate benefits.
