Over eighty years ago, Social Security established a financial safety net for elderly workers unable to support themselves anymore. According to data analyzed by the Center on Budget and Policy Priorities, the program helped lift 22.7 million individuals out of poverty in 2022, with 16.5 million being seniors aged 65 and older.
However, what makes America's premier retirement plan intriguing is that the typical monthly benefit usually ends up being quite moderate.
What you receive every month from Social Security It mainly depends on various personal factors specific to you. Let’s quickly go over the elements that influence your monthly Social Security payment and thoroughly examine the typical average monthly Social Security benefit across different ages.
What factors determine your calculation for Social Security benefits?
Even though Social Security may seem complicated and bewildering at times, the four factors used by the Social Security Administration (SSA) to determine your monthly benefits are quite straightforward. These four components include your:
- Work history
- Earnings history
- Full retirement age
- Claiming age
The first two elements are closely linked. When determining your monthly benefit amount, the SSA considers your 35 highest-income years adjusted for inflation. Should you accumulate higher earnings over your working life—this includes wages and salaries, excluding investment income—it increases the likelihood of receiving a larger Social Security payment upon retiring.
The catch is that the SSA imposes penalties on retirees with fewer than 35 years of work experience. Each year below 35 not worked leads to an average of $0 being included in their calculations.
The age at which you reach full retirement is when you qualify for receiving your entire monthly retired-worker benefit amount. Since It's based on the year you were born. It’s the single aspect you cannot influence. The majority of today's labor force (individuals born in or after 1960) reaches their complete retirement age at 67.
The fourth element influencing your monthly Social Security payment is your age at which you decide to claim benefits. Arguably, this choice might have a greater impact on the amount of your payouts than any other aspect.
Even though retirees can start receiving their benefits as young as at age 62, Social Security still applies. provides financial motivation to foster endurance For each year a worker delays collecting their payment from ages 62 to 69, their benefit amount may increase by up to 8% annually, as detailed in the following chart.
| Birth Year | Age 62 | Age 63 | Age 64 | Age 65 | Age 66 | Age 67 | Age 68 | Age 69 | Age 70 |
| 1943-1954 | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% | 132% |
| 1955 | 74.2% | 79.2% | 85.6% | 92.2% | 98.9% | 106.7% | 114.7% | 122.7% | 130.7% |
| 1956 | 73.3% | 78.3% | 84.4% | 91.1% | 97.8% | 105.3% | 113.3% | 121.3% | 129.3% |
| 1957 | 72.5% | 77.5% | 83.3% | 90% | 96.7% | 104% | 112% | 120% | 128% |
| 1958 | 71.7% | 76.7% | 82.2% | 88.9% | 95.6% | 102.7% | 110.7% | 118.7% | 126.7% |
| 1959 | 70.8% | 75.8% | 81.1% | 87.8% | 94.4% | 101.3% | 109.3% | 117.3% | 125.3% |
| 1960 or later | 70% | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% |
Source of data: Social Security Administration.
What is your monthly income from Social Security?
Now that we've grasped how your specific factors might influence your Social Security benefits, let’s delve into the core of what you're curious about: What is the monthly amount you can expect from Social Security?
According to the SSA's monthly update, the mean advantage for the 51 million retirees In May, the amount was $1,916.63, equivalent to approximately $23,000 annually.
However, we can go a step further and divide the typical monthly retirement benefits for workers by their ages.
Each year, the SSA's Office of the Actuary releases data on the average monthly Social Security benefits for individuals aged 62 to 99 and above. Please remember that this table below is derived from those publications. age of each recipient in December 2023 and may have nothing to do with the age at which they claimed benefits. For example, a retired worker receiving benefits at age 66 may have begun collecting their payout anywhere from ages 62 through 66.
| Age | Average Retirement Benefit | Age | Average Retirement Benefit |
|---|---|---|---|
| 62 | $1,298.26 | 81 | $1,943.00 |
| 63 | $1,338.65 | 82 | $1,942.41 |
| 64 | $1,459.73 | 83 | $1,920.50 |
| 65 | $1,563.06 | 84 | $1,882.72 |
| 66 | $1,739.92 | 85 | $1,864.04 |
| 67 | $1,883.50 | 86 | $1,833.70 |
| 68 | $1,948.37 | 87 | $1,779.58 |
| 69 | $1,945.18 | 88 | $1,755.44 |
| 70 | $2,037.54 | 89 | $1,752.01 |
| 71 | $2,050.67 | 90 | $1,757.84 |
| 72 | $2,023.00 | 91 | $1,781.97 |
| 73 | $1,990.43 | 92 | $1,769.78 |
| 74 | $2,000.45 | 93 | $1,763.11 |
| 75 | $2,012.14 | 94 | $1,762.84 |
| 76 | $1,982.36 | 95 | $1,769.85 |
| 77 | $1,996.49 | 96 | $1,773.24 |
| 78 | $1,949.44 | 97 | $1,753.36 |
| 79 | $1,942.45 | 98 | $1,761.40 |
| 80 | $1,940.24 | 99 and over | $1,715.05 |
Data source: Social Security Administration Office of the Actuary, as of December 2023. Table by author.
This table illustrates the significance of being patient if you aim to substantially boost your monthly Social Security benefit. While those who filed at the earliest opportunity earned under $1,300 in December 2023, Recipients aged 70 received an advantage that averaged at 57% more. .
Based on their birth year, individuals who turn 70 may see their monthly Social Security benefit increase by 24% to 32% compared to what they would receive upon reaching full retirement age. On the other hand, those claiming benefits at 62 will face a consistent decrease of 25% to 30% per month for the rest of their lives, varying according to their specific birth year.
You may observe that monthly benefits generally decrease and level off after the age of 83. This trend is related to Women typically outlive men by several years. .
The reduction in the average amount of Social Security benefits received later in life can be attributed to a higher number of women opting to remain at home for child-rearing duties rather than participating in the workforce and earning wages. As per data from the Pew Research Center, between 1989 and 2021, only about 4% to 9% of fathers chose this role as stay-at-home parents during those years. In stark contrast, approximately 23% to 29% of mothers assumed the responsibility of being full-time caregivers within the same period.
The simplest methods to increase your Social Security payout are threefold.
Although Social Security wasn't intended to enrich retirees significantly, several tactics are available for those approaching retirement that could boost their final benefit amount.
Firstly, one should practice being patient. Earlier, I mentioned that for each year a retiree postpones collecting benefits starting from age 62 up till they turn 70, their monthly benefit could increase by an impressive 8%. Delaying collection for several years might significantly enhance your monthly Social Security income.
To expand on this, a comprehensive study conducted by the online financial planning firm United Income, based on the Social Security claiming choices of 20,000 retirees, revealed that Age 70 would result in maximum lifetime benefits for 57% of those claiming. .
Another clever strategy for those planning to retire in the future is leaning on SSA-521 Officially called "Request for Withdrawal of Application," form SSA-521 enables individuals whose circumstances have altered or who reconsider their initial application choice to withdraw their request. Should the Social Security Administration approve this action, your payments will restart and accumulate at an annual rate of up to 8%, building toward future benefits collection.
However, This provision for redoing your Social Security has certain restrictions. Firstly, you will be required to repay every single dollar that both you and your family have obtained through Social Security using your earning record. Moreover, such a request may only be submitted within twelve months following the submission of your original application.
The third method to increase your total Social Security earnings over your lifespan is to be aware of the specific factors that are important to you While it would be ideal if we had a flawless roadmap indicating exactly when to claim benefits, such foresight isn’t achievable without prior knowledge of our “leaving date.”
To get the most out of America’s premier retirement plan, you must thoroughly grasp your financial requirements, consider how taxes and marital status may influence your choice, and comprehend how your individual health might impact your capability to draw a consistent Social Security payment over time. These distinct factors could render claiming early or at mid-point a more prudent strategy for optimizing your total lifetime Social Security benefits.
The $ 22,924 The Social Security benefit many seniors fail to notice entirely.
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