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75% of Workers Lack Key Social Security Knowledge. Here Are 5 Things About the Program You Need to Know

By Maurie Backman – Aug 12, 2021 at 7:04AM

Key Points

  • Social Security is a key income source for seniors.
  • Many workers don't understand how the program works.
  • Getting educated on Social Security could be your ticket to higher benefits once you retire.

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If you're in the dark about Social Security, here are some important points to keep in mind.

Millions of seniors today rely on Social Security to cover their retirement expenses, and the more you know about the program, the better prepared you'll be for retirement. But only 25% of workers across all generations say they know a great deal about how the program works, according to the 21st Annual Transamerica Retirement Survey. If you're in the dark about Social Security, here are a few key things you need to know.

1. Your monthly benefit will be based on your earnings

Social Security doesn't pay all seniors the same benefit. Rather, your benefit will be calculated based on your average monthly wage over your 35 highest-paid years in the workforce, adjusted for inflation. The more you earn, the higher a benefit you'll receive.

A senior couple sitting in their kitchen in front of a laptop.

Image source: Getty Images.

2. You're eligible for your full benefit at a specific age

You're entitled to your full monthly benefit based on your earnings history once you reach full retirement age, or FRA. Here's what that age looks like for you:

If You Were Born in:

Your FRA Is:




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months

1960 or later


Data source: Social Security Administration. Chart by author.

You don't have to sign up for Social Security at full retirement age, but it's important to know when that age is.

3. You can sign up for Social Security as early as 62

You're allowed to access your Social Security benefits before reaching FRA. But for each month you file early, your monthly benefit will be reduced on a permanent basis.

Age 62 is the earliest age you can take benefits. If you go that route and your FRA is 67, your monthly benefit will shrink by 30%.

4. You can delay your filing for a higher benefit

Just as you're allowed to sign up for Social Security before FRA, you can also delay your filing. Doing so could make you wealthier in retirement.

For each month you hold off on claiming benefits, they'll increase by 2/3 of 1%. All told, waiting to file for a full year past FRA will boost your benefits by 8%.

Once you turn 70, you can't grow your monthly benefit any longer, so it pays to sign up for Social Security at that point. But if your FRA is 67 and you wait until 70 to file, you'll snag a 24% boost that will remain in effect for the rest of your life.

5. Your spouse may be entitled to benefits based on yours

If you have a spouse who never worked, they may be entitled to a spousal benefit equal to 50% of your benefit. In this situation, your spouse can only start collecting Social Security once you begin doing the same, so if you're married, you should collaborate with your spouse on a filing strategy that works for both of you.

Meanwhile, if you pass away before your spouse, he or she will be entitled to a survivors benefit equal to the monthly benefit you collect in your lifetime. Keep this in mind if you're much older than your spouse. Delaying your filing could leave your spouse with a much higher monthly income in your absence.

There's lots to learn about Social Security, so take the time to read up on the program's ins and outs. The more you educate yourself, the better-positioned you'll be to make smart decisions when the time comes to think about filing for benefits.

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