Social Security can make or break retirement for many older adults. As costs continue to rise and it becomes even more difficult to save enough for a comfortable retirement, millions of seniors are relying heavily on their benefits to make ends meet.
But the average retired worker collects less than you might expect from Social Security, and depending on the age you file for benefits, your checks could potentially be even smaller than that.
Here's exactly how much the average retired worker collects in benefits, as well as the average benefit amount by age. And if you're looking to beat these numbers, there are a few actionable steps you can take right now.
The average Social Security benefit by age
Your benefit amount is based on several factors, including the length of your career, your earnings history, and the age you begin claiming. To receive the full benefit amount you're entitled to based on your work record, you'll need to wait until your full retirement age (FRA) to file.
Your FRA will depend on your birth year, but it's age 67 for anyone born in 1960 or later. If you file as early as possible at age 62, your benefit will be permanently reduced by up to 30%. Delaying claiming until age 70, on the other hand, will result in collecting your full benefit amount, plus a bonus of between 24% and 32% per month.
Data source: The Motley Fool.
According to the most recent data as of the end of 2022, the average Social Security benefit among all retired workers was around $1,908 per month. But there was a lot of variation when breaking down the average benefit by age.
Among retired workers who claimed at age 62, the average benefit was just $1,288 per month. At age 67, the average payment was around $2,400 per month, and at 70, it was $3,065 per month.
While claiming at 62 will drastically reduce your monthly payments, it's by far the most popular time to file. Around 35% of men and nearly 40% of women file at that age, according to a 2020 survey from the Bipartisan Policy Center. Meanwhile, only around 5% of men and women wait until age 70 to take benefits.
How to beat the average benefit
Perhaps the easiest way to increase your monthly payments is to delay claiming. Again, waiting until age 70 to file will give you a boost of between 24% and 32% per month on top of your full benefit amount. In some cases, that can amount to several hundred dollars more per month.
Delaying benefits isn't your only option, though. There are a few other strategies to increase the size of your checks:
- Work for at least 35 years: The Social Security Administration calculates your benefit by taking an average of your earnings over the 35 highest-earning years of your career. That number is then run through a formula to adjust it for inflation, and the result is the amount you'll collect at your FRA. If you haven't worked a full 35 years before filing, you'll have zeros added to your average -- which will reduce your payments.
- Boost your income: Because your benefit is based on your career earnings, a higher income will give you a larger benefit -- up to a point. The maximum taxable earnings limit is the highest income subject to Social Security taxes, and the closer you can get to this cap, the more you'll receive each month. This limit changes from year to year to account for inflation, but it's $168,600 per year in 2024.
- Take advantage of spousal or divorce benefits: If you're married or divorced, you could be entitled to spousal or divorce benefits. There are a few requirements you'll need to meet to qualify, but you could receive up to 50% of your spouse's or ex-spouse's benefit amount at their FRA.
Social Security can make an enormous difference in retirement, so it pays to ensure you're making the most of it. When you know which factors affect your benefits, as well as how to increase those payments, it will be easier to squeeze every penny out of your monthly checks.
