25 Apr How much Social Security can I get?

Q. I will be 65 in July. I am unemployed and have recently started to collect unemployment benefits in April. As of my last paycheck, I made $43,171.10 in 2025. I applied for Social Security and Medicare benefits on April 1. Will my unemployment benefits affect my Social Security/Retirement benefits? Per my Social Security statement on April 1, for age 64 and 9 months, the estimated retirement benefit is $3019. However, since I made $43,171.10 in 2025, how much will I actually get for my retirement benefit? What would be my estimated retirement benefit after I reach the full retirement age of 67? Will I be able to return to full time work after I reach 67? Is there an income limitation in order to continue to receive retirement benefits?
— Changing gears

A. Those are a lot of questions.

First, we’re sorry to hear about your job loss.

When it comes to estimating your Social Security benefits at different ages, the agency’s website is your best source. You can log in and see your estimated benefits.

But here, let’s explain how benefits are calculated and how it all works.

Social Security is a retirement benefit that is calculated based on a person’s lifetime earnings, specifically the 35 highest-earning years, adjusted for inflation, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

This adjusted average is called the Average Indexed Monthly Earnings (AIME), and a formula is then applied to determine the monthly benefit amount. This monthly benefit is the Primary Insurance amount or PIA, which is the payment that would be received when reaching full retirement age (FRA), she said.

“As you continue to work, the benefit amount will be adjusted if your recent earnings are higher than those in the past,” she said. “Additionally, cost of living adjustments may be made depending on the current rate of inflation.”

Unemployment benefits are generally not considered earned income by Social Security for determining retirement or disability benefits, Mott said.

“This means receiving unemployment benefits will not reduce your Social Security benefits nor would it lead to any increase. In some states, receiving Social Security can reduce the amount of unemployment income that an individual can receive but that is not the case in New Jersey,” she said.

For those born in 1960 or later, FRA is now age 67. If you begin receiving Social Security retirement benefits before your full retirement age, your monthly benefit will be permanently reduced, she said.

“The reduction is 5/9 of 1% per month for each month before your full retirement age, up to 36 months, and 5/12 of 1% per month for each additional month,” she said. “For example, claiming benefits at age 62, which is 60 months before the full retirement age of 67, results in a 30% reduction in monthly benefits.”

Regarding what you will receive for a benefit, there are two factors that will influence that amount, Mott said. The first is when you file, and the second is your recent income.

“Given that you have chosen to start your benefits before reaching age 67, your benefit amount is going to be reduced. Any earnings that you have had recently will be included in your history and the benefit will be adjusted if the most recent income is higher than a prior year,” she said.

Social Security typically makes adjustments in October both for earnings and cost of living and a new benefit document should be mailed to you. Until that time, it’s unlikely that your benefit will be any different from what was on your most recent statement, she said.

Your FRA benefit can be found on your statement which is available at SSA.gov.

“The report will typically provide benefit estimates for a number of ages and it will include the current value based on your age and the date of the report,” she said. “Other projections include ages 65 and 66, FRA and age 70 which is the latest one can file for benefits.”

“However, by filing early you have cemented the reduced benefit amount and it will not be adjusted when you reach age 67,” Mott said, noting that adjustments to the amount will be based on new earnings or the COLA.

Should you return to work, your new income will be reported to Social Security and may be factored into the annual adjustment depending on how it compares to past years, Mott said.

However, the issue you may face is whether your Social Security will be taxed.

“You will pay federal income taxes on your benefits if your combined income — 50% of your benefit amount plus any other earned income — exceeds $25,000 a year if filing as an individual or $32,000 for a joint filing,” she said. “Your unemployment income will also be counted towards the taxable income used to determine this.”

There are two income thresholds that determine how much of the Social Security benefit will be taxed, so 50% or 85% of the benefits could be taxed.

In the event you find employment that provides enough income to support you, there is a short window of time that would enable you to stop your Social Security, Mott said.

“You can withdraw your application within the first 12 months of eligibility, but you’ll need to repay all benefits received, including those of family members and any withheld amounts,” she said. “This can only be done once, but it would enable you to let your benefit amount grow and no longer be reduced for early filing or subject to income tax while you are employed.”

To withdraw, you’ll need to complete and submit Form SSA-521 to your local Social Security office, she said.

Email your questions to Ask@NJMoneyHelp.com.

This story was originally published in April 2025.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.