Navigating Social Security can be complex, especially when planning for retirement. In 2025, on average, nearly 69 million Americans will receive a Social Security benefit, totaling $1.6 trillion in payments.1
Yet some confusion still surrounds claiming Social Security for retirement income. Understanding how the system works is essential. Here are six answers to common Social Security questions to help you make informed decisions.
1. Can my retirement income affect my Social Security benefits?
Yes – if you're under full retirement age and earn more than $23,400 in 2025, your benefits may be reduced. For every $2 earned over the limit, $1 is withheld. If you reach full retirement age (66–67 depending on birth year), your earnings no longer affect your benefits.2
2. What if my employer didn’t withhold Social Security taxes?
If you worked in a job not covered by Social Security – such as certain public sector roles or overseas employment – you may have been subject to the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO). These provisions previously reduced or eliminated benefits for over 2.8 million people who receive a pension based on work that was not covered by Social Security.
However, as of January 2025, the Social Security Fairness Act repealed both WEP and GPO. Affected retirees are now receiving retroactive payments and increased monthly benefits.3
3. Will my pension lower my Social Security benefits?
It depends. Private-sector pensions generally do not affect Social Security benefits. But public-sector pensions from jobs where you didn’t pay Social Security taxes previously triggered WEP or GPO reductions.
With the repeal of these provisions, many public employees – such as teachers, firefighters, and federal workers – are now receiving full Social Security benefits.4
4. Is a pension considered income for Social Security purposes?
No. Pension payments are not considered earnings by Social Security, so they don’t affect your benefit amount. Pension payments, annuities, and the interest or dividends from savings and investments are not earnings for Social Security purposes. You may need to pay income tax, but not Social Security taxes.5
5. How much of my retirement income will come from Social Security?
Social Security is designed to provide some income in retirement, but it will not be enough to maintain the standard of living you had while working. It typically replaces about 40% of pre-retirement income, but this varies based on your earnings history. In 2025, replacement rates range from:
- 78.7% for very low earners (an average of about $17,400 per year)
- 42.6% for medium earners (about $67,000 per year)
- 27.9% for high earners (about $171,000 per year)
Financial experts recommend replacing 70–85% of your pre-retirement income to maintain your lifestyle, so Social Security should be just one part of a broader retirement plan.6
6. Will my Social Security benefits be enough?
Most likely not, given the recommended 70-85% replacement rate. And according to the 2025 Trustees Report, the OASI Trust Fund (which pays retirement benefits) is projected to be depleted by 2033. After that, Social Security will only be able to pay 77% of scheduled benefits unless Congress acts.7
To prepare, consider boosting your savings through 401(k)s, IRAs, or other investments. Social Security is a vital foundation, but not a complete solution.
While Social Security remains a critical part of retirement planning, it’s not a one-size-fits-all solution. With recent legislative changes and evolving financial forecasts, staying informed is key. Consider consulting a financial advisor to tailor your retirement strategy and help ensure a secure tomorrow.
