* These benefits are based on steady lifetime earnings from age 22 through the year before retirement. In 1995, the year these figures are based on, these earnings were approximately $11,100 for low-wage earners, $24,700 for average earners, and $61,200 or above for high earners.

** Married workers can receive benefits based either on their own work record or their spouse’s, whichever is higher.

Q: How are Social Security retirement benefits determined?

A: The Social Security system is designed so there’s a link between how much you pay into the system, and how much you’ll get in benefits. Therefore, high-wage earners get more, and low-wage earners get less.

However, because benefits are intended to only supplement your other retirement income, the benefit formula is weighted in favor of low-wage earners who have fewer resources to save for retirement during their working years. Specifically, Social Security retirement benefits replace approximately 60% of the preretirement earnings of low-wage earners, 42% of the earnings of average-wage earners, and 26% of the earnings of high-wage earners.

Q: Can I count on Social Security being there when I retire?

A: The Social Security Administration says that you can count on Social Security being there when you need it. However, a swelling population of retirees and increasing life expectancies will likely lead to more changes in the Social Security system. Already, in addition to increases in the age at which full benefits can be collected, there are increases in the penalty for taking benefits early, and the benefits of higher-income retirees are subject to federal income tax. In fact, according to the Social Security Administration, about 20% of those who currently receive retirement benefits have to pay taxes on their benefits.

Future changes may include additional increases in the full retirement age, delays or limits on cost-of-living adjustments, further taxation or reduction of benefits for higher-income retirees, or increases in the amount of Social Security taxes levied on current workers.

Q: When can I start receiving benefits?

A: Currently, retirees can receive full Social Security retirement benefits at age 65. However, because of longer life expectancies, the full retirement age will increase starting in the year 2003 for those born in 1938 and later. For example, if you were born between 1943 and 1954, the full retirement age is 66. If you were born after 1960, it's 67.

Q: What’s the earliest I can receive benefits??

A: You can start receiving Social Security benefits as early as age 62, but your monthly benefit will be permanently reduced. For example, if you were born in 1960 or later and you begin taking benefits early at age 62, instead of the full retirement age of 67, your benefit will be reduced by about 30%. However, taking benefits early generally gives you about the same total benefits over your lifetime, but in smaller amounts to take account of the longer period you’ll receive them. Most of today’s retirees start taking benefits at age 62.

Q: What about increases for delaying retirement?

A: If you work beyond your full retirement age, your benefit will be increased by a specific percentage until you start taking benefits, or until you reach age 70. The percentage varies depending on the year you were born. For example, if you were born in 1943 or later, you’d receive an 8% annual increase.

Q: How are benefits determined for married couples?

A: A spouse receives one-half of a retired worker’s full benefit,unless the spouse begins collecting benefits before age 65. In that case, the amount of the spouse’s benefit is permanently reduced.

If you’re eligible for both your own retirement benefits based on your work record, as well as benefits as a spouse, Social Security will first pay your own benefit. If your benefit as a spouse is higher than your own benefit, you’ll get a combination of benefits that together equals the higher spouse benefit.

Q: How are benefits determined for divorced spouses?

A: Divorced spouses can get benefits based on a former spouse’s Social Security record if the marriage lasted at least 10 years. The divorced spouse must also must be age 62 or older, and presently unmarried. The amount of benefits a divorced spouse gets has no effect on the amount of benefits a current spouse is eligible to receive.