Social Security 101


Social Security gives you:

  • Guaranteed lifetime income
  • Benefits that are adjusted for inflation
  • Survivor benefits
  • Preferential tax treatment compared with ordinary income

Will Social Security cover all your retirement needs?

Probably not. Social Security may only be about 40% of your pre-retirement income.1

When can you file?

You can start getting Social Security as early as 62 (with a potential reduction in benefits by as much as 30%).2 When you hit full retirement age (FRA), you can get Social Security without a penalty. Your full retirement age varies based on the year and month you were born.

54% of individuals filed for Social Security benefits early

How is Social Security calculated?

It’s based on your lifetime Social Security earnings and adjusted for inflation. The basic formula is the total of your highest 35 years of adjusted earnings divided by 420 (the number of months in 35 years) equals your monthly average earnings. Your benefits are determined using this amount and the maximum benefit cap. The monthly amount you receive if you file at your FRA is called the Primary Insurance amount (PIA).

Eligible for 100% of benefits

1943-1954 66
1955 66 + 2 months
1956 66 + 4 months
1957 66 + 6 months
1958 66 + 8 months
1959 66 + 10 months
1960-later 67
Delaying taking Social Security benefits from 67 to 70 can increase the monthly benefit by 24%
[2], based on filing between age 62 and FRA.

[3][4] Source: SS Supplement 2018. Table 6.B5, Social Security Administration, 2017 calendar year.

Neither Nationwide nor its representatives give legal or tax advice. Please consult your attorney or tax advisor for answers to your specific tax questions.