Understanding Social Security > Old-Age Benefits



Old-Age Benefits

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A portion of the payroll taxes individuals pay after they begin working funds the Social Security Old-Age (retirement) Insurance program.  When an individual claims retirement benefits, SSA calculates the benefits they qualify for based on the average income of their 35 highest earning years (with a minimum of 10 highest earning years).  Individuals can apply to receive reduced retirement benefits payments as early as age 62 and their full benefits at their full retirement age (between 65 and 67 depending on their year of birth).

An individual’s retirement benefits are indexed to the age they claim, so the amount they receive in benefits will increase up to age 70.  Retirement benefit payments are cost-of-living adjusted (COLA).

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Fast Facts

June 2013 Beneficiary Data

Retired Workers


37 million retired workers

$47.4 billion in benefits

$1,269 average monthly benefit




2.9 million dependents

$1.8 billion in benefits


  • Retired workers and their dependents account for 70% of total benefits paid.
  • 9 out of 10 individuals age 65 and older receive Social Security benefits.
  • Social Security benefits represent about 39% of the income of the elderly.
  • Among elderly Social Security beneficiaries, 53% of married couples and 74% of unmarried persons receive 50% or more of their income from Social Security.
  • Among elderly Social Security beneficiaries, 23% of married couples and about 46% of unmarried persons rely on Social Security for 90% or more of their income.