If you’re approaching retirement, understanding your Social Security benefits is crucial. In 2025, many 65-year-olds will receive an average monthly Social Security payout of $1,622.
However, the exact amount varies based on work history, earnings, and when benefits are claimed. Let’s break down who qualifies, how to maximize benefits, and other key factors affecting Social Security payments.
Eligibility
To qualify for Social Security retirement benefits, you must earn at least 40 work credits, which generally equates to 10 years of work. Work credits are based on your income, and in 2025, you earn one credit for every $1,640 in wages.
Another critical factor is Full Retirement Age (FRA). If you were born in 1960 or later, your FRA is 67 years old. Claiming benefits before this age results in a reduced monthly payout.
Understanding the $1,622 Payout
The $1,622 monthly payout is the estimated average for 65-year-olds in 2025. However, the exact amount each person receives depends on:
- Earnings history – Social Security calculates benefits based on the highest-earning 35 years of your career.
- Claiming age – Starting benefits at age 62 leads to a lower payout, while delaying until age 70 increases benefits.
- Spousal benefits – A spouse may receive up to 50% of their partner’s benefit if they meet the eligibility requirements.
Table: Key Social Security Details
| Key Factor | Details |
|---|---|
| Average Monthly Benefit | $1,622 for 65-year-olds in 2025 |
| Work Credits Needed | 40 (about 10 years of work) |
| Full Retirement Age (FRA) | 67 for those born in 1960 or later |
| Early Claiming Penalty | Reduced benefits if claimed before FRA |
| Delayed Retirement Bonus | 8% increase per year until age 70 |
| Spousal Benefits | Up to 50% of partner’s benefit |
How Social Security is Calculated
Step 1: Work Credits
To be eligible, you must earn 40 credits from working and paying payroll taxes. You can earn up to four credits per year based on income.
Step 2: Average Indexed Monthly Earnings (AIME)
Social Security calculates your AIME using your highest-earning 35 years. If you worked fewer years, missing years count as zero.
Step 3: Primary Insurance Amount (PIA)
Your PIA is the base amount you will receive at FRA. Social Security applies a formula that replaces a percentage of your AIME.
Step 4: Adjustments Based on Claiming Age
The age at which you claim benefits impacts your monthly amount:
- Age 62 – Benefits reduced by up to 30%.
- Full Retirement Age (67) – You receive 100% of your benefit.
- Age 70 – Your benefit increases by 8% per year past FRA.
Other Important Considerations
Cost-of-Living Adjustments (COLA)
Each year, Social Security benefits may increase due to inflation adjustments. For example, in 2024, COLA was 8.7%, the highest in decades.
Working While Receiving Benefits
If you work before FRA, Social Security may reduce your benefits if you earn above a certain threshold. In 2025, the limit is $21,240, and for every $2 earned above the limit, $1 is deducted from benefits. Once you reach FRA, there are no earnings limits.
Disability and Social Security
Individuals who cannot work due to a disability may qualify for Social Security Disability Insurance (SSDI). These benefits are based on work history and earnings before the disability.
Funding Social Security
Social Security is primarily funded through payroll taxes:
- Employees pay 6.2% of wages.
- Employers match 6.2%, making a total of 12.4%.
- Self-employed individuals pay the full 12.4% themselves.
For many 65-year-olds, the $1,622 monthly Social Security check will be a key part of their retirement income. While this is an average estimate, your actual benefit amount depends on your earnings, work history, and when you start claiming.
Understanding how Social Security works can help you make informed decisions and maximize your benefits for a financially secure retirement.
