15 Factors That Determine Your Social Security Check

Social Security may not provide as much income as most (or all) of us would like, but the income it does provide is critical to the survival of millions of people. For example, it keeps more than 15 million people out of poverty and provides 50% or more of retirement income for more than a third of older beneficiaries. The average monthly retirement benefit check was recently $1,658 -- providing close to $20,000 annually. Here are 15 factors that determine how much you will collect -- and some of them are within your control.

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You won't receive any Social Security benefits at all if you haven't earned enough credits to qualify for them. Fortunately, that's a fairly easy hurdle to clear: You only need to accumulate 40 credits over your working life, and you can earn four per year, or one per quarter. For 2022, the value of a credit is $1,510 -- equating to $6,040 annually. So most people easily qualify after working for 10 years.

The income you've earned over your working life will also dictate how much you receive in benefits. The more you've earned (up to a limit), the more you will receive. The maximum monthly benefit was recently $4,194 -- or about $50,000 annually. To collect that, you would have had to have earned the maximum in each year. For 2022, the maximum is $147,000.

The length of your working life also plays a part in the size of your benefit checks. The formula averages your income over the 35 years in which you earned the most -- and, of course, it adjusts past years' incomes for inflation. So if you've only worked for 30 years, it will be incorporating five zeros into the calculations, bringing down the benefits you'll collect. Pro tip: Try to work for at least 35 years.

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You may have figured this out by now, but here's a way to beef up your benefits: Work for more than 35 years -- if you're earning more now (on an inflation-adjusted basis) than you have in the past, or if you have a few years with meager earnings in your record. For each additional year with solid or high earnings, you'll be kicking out a year with low earnings, thereby increasing the size of your future benefit checks.

Each of us has a "full retirement age" -- that's the age at which we can start collecting the full benefits to which we're entitled, based on our earnings history. The age used to be 65 for everyone, but it has been increased over the years. For most of us, it's now 66 or 67, and it depends on just when you were born.

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Once you hit your full retirement age, you can start collecting the full benefits that your earnings record has entitled you to. But you can start collecting them as early as age 62 and as late as age 70 -- and you can make your benefit checks bigger or smaller depending on when you start collecting.

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If you start collecting your Social Security checks early, they will be smaller. Yes, that may be a bummer, but remember -- you'll be collecting a lot more of them than someone who starts collecting them late. You can start collecting at age 62 (and most people actually do start at 62 or 63), and if your full retirement age is 66 or 67, you'll receive checks that are 75% or 70% smaller than they would be had you started collecting at your full retirement age.

If you start collecting your Social Security benefits late, you'll increase them by about 8% for every year beyond your full retirement age that you delay. Delay from 67 to 70 and presto -- you'll make your checks some 24% bigger. That's a lot, but you'll be receiving many fewer checks than someone who started collecting at age 62. It actually works out to roughly the same total benefits no matter when you start collecting, for those who live average-length lives. If you have a good chance of living an extra-long life, it can be well worth delaying, if you can.

The size of your benefit checks can be affected if you're working while collecting benefits -- and you're at or younger than your full retirement age. Here's the scoop, from the Social Security Administration: "If you are younger than full retirement age and earn more than the yearly earnings limit [which is $19,560 for 2022], we may reduce your benefit amount. If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit. … In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above [$51,960]."

ALSO READ: Can I Work While on Social Security?

The income that you have earned in the past and that you're earning now will determine the size of your Social Security benefits to a great degree. You may be able to give yourself a little Social Security raise if you're at least a few years from starting to collect and if you can turbocharge your earnings in that time. For example, you might take on a side gig or two -- perhaps working a part-time job on some evenings or selling things you make in online marketplaces.

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Not everyone realizes that Social Security benefits can be taxed -- specifically, up to 85% of them can, if you earn more than a certain amount. That's taxation at the federal level. On top of that, some states tax your benefits, too -- though 37 states don't tax Social Security. Reading up on the latest rules at the right time can help you strategize in order to minimize your taxes.

Cost-of-living adjustments (COLAs) will also change your Social Security benefits from time to time. They happen every year or every few years, but they can be problematic. After several years of little to no increases, the last bump was a relatively big one, of 5.9%. But inflation seems to be running at a higher rate than that, so it may not be enough of an increase for many seniors. Also, inflation is calculated in a suboptimal way for Social Security increases, underweighting healthcare and housing costs, which tend to be significant for retirees.

ALSO READ: 2022's Social Security Raise Is Already Failing Seniors -- Here's Why

Whether you're claiming a spousal Social Security benefit will also affect how much you receive from the program, because spousal benefits are capped at 50% of your spouse's benefits. That may be disappointing, but for those who have worked many years without income, such as tending a home and raising children, that 50% can be a lot better than the alternative.

Claiming a Social Security disability benefit will also affect the magnitude of your Social Security income, and those benefits, like retirement benefits, are largely based on your earnings history -- how long you worked and how much you earned. These benefits may be hard to qualify for, as you'll need to meet the Social Security Administration's definition of disabled and you'll have to not be engaged in any "substantial gainful activity."

ALSO READ: Social Security Disability: Everything You Need to Know

Finally, if your Social Security benefits are survivors benefits, they will also follow certain rules, and be determined in large part by the earnings history of the deceased. You may be surprised to learn that among those who might be eligible for survivor benefits are not only the deceased's surviving spouse, but also his or her children, grandchildren, and even ex-spouses.

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Social Security is so important to so many of us that we would do well to read and learn more about it -- and to refresh ourselves on its latest developments now and then. Doing so will help you make smart decisions regarding it, and it can help you maximize what you get out of the program.

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