Social Security is a federal program that provides income to retired workers, disabled workers, and the families of deceased workers. For most Americans, it will be a meaningful part of their retirement income. Here is how it works in 2026.
How Social Security Is Funded
Social Security is funded through payroll taxes. If you are an employee, 6.2% of your wages up to $176,100 (the 2026 wage base) goes toward Social Security. Your employer matches that with another 6.2%. If you are self-employed, you pay both portions — 12.4% — through self-employment tax.
These taxes go into the Social Security trust fund. When you retire, you draw from this fund based on your own work history.
How Your Benefit Is Calculated
Your Social Security retirement benefit is based on your 35 highest-earning years of work history (adjusted for inflation). The SSA calculates your Average Indexed Monthly Earnings (AIME), then applies a formula to get your Primary Insurance Amount (PIA) — the benefit you receive at full retirement age.
Higher lifetime earnings generally mean a higher benefit. If you worked fewer than 35 years, zeros are averaged in for the missing years, which reduces your benefit.
Full Retirement Age in 2026
Your full retirement age (FRA) depends on when you were born:
- Born 1943 to 1954: FRA is 66
- Born 1955 to 1959: FRA increases gradually (66 years and 2 months to 66 years and 10 months)
- Born 1960 or later: FRA is 67
If you were born in 1960 or later — which covers most people in the workforce today — your full retirement age is 67.
When Can You Start Collecting?
You can claim Social Security retirement benefits as early as age 62. But claiming early permanently reduces your monthly benefit. Here is how it works:
- Claiming at 62: Benefit is permanently reduced by up to 30% compared to your FRA benefit.
- Claiming at full retirement age (67): You receive 100% of your earned benefit.
- Delaying past FRA: Your benefit grows by 8% per year for each year you wait past FRA, up to age 70. Waiting until 70 gives you a benefit that is 24% higher than at 67.
The math favors waiting if you are healthy and expect to live into your 80s. It favors claiming early if you have health issues or need the income immediately.
Social Security for Spouses
A spouse can receive up to 50% of their partner’s FRA benefit, even if they never worked or had lower earnings. To qualify, you must be at least 62 and your spouse must have already filed for benefits.
Divorced spouses can also claim benefits on an ex-spouse’s record if the marriage lasted at least 10 years, you are currently unmarried, and you are at least 62.
Survivor Benefits
If a Social Security recipient dies, their surviving spouse can claim survivor benefits — up to 100% of the deceased’s benefit amount. Survivor benefits can begin as early as age 60 (age 50 if disabled). Children under 18 may also receive survivor benefits.
Social Security Disability Insurance (SSDI)
If you become disabled before retirement age and cannot work, Social Security Disability Insurance (SSDI) provides monthly payments. To qualify, you must have worked long enough and recently enough (typically 5 of the last 10 years), and your disability must be expected to last at least 12 months or result in death.
Will Social Security Be There When You Retire?
This is a common concern. The Social Security trustees estimate that the trust fund could face a shortfall by the mid-2030s if no changes are made. However, even in that scenario, payroll taxes would still cover roughly 77% to 83% of scheduled benefits. A complete elimination of Social Security is extremely unlikely — Congress has always acted to adjust the program before cuts of that scale. Planning to receive at least a partial benefit is a reasonable assumption for most workers.
Bottom Line
Social Security provides a guaranteed income floor in retirement that you cannot outlive. The longer you wait to claim (up to age 70), the higher your monthly benefit. Pair your Social Security with personal savings in a 401(k) or IRA so you are not relying on it as your only income source in retirement.