If you're a pre-retiree already mapping out a post-retirement budget, then you may know that the average Social Security retirement benefit payment for 2024 is $1,907 a month.
The funny thing about averages is that they don't necessarily tell you everything you need to know. At least some retirees are cashing monthly Social Security checks as big as $4,873. Still others are collecting less than $300 per month. That's a wide range of possibilities, making it tough for you to make a spending plan -- unless you know exactly how much you're personally due in Social Security retirement benefits.
Well, the table below should help you get a better handle on what you can expect to receive from the Social Security Administration once you finally claim benefits.
Social Security retirement benefits breakdown
Before exploring the visualized data, there are a couple of important footnotes to add to the discussion. One of them is simply that the numbers on the chart are average benefits being paid out, without any consideration as to how many years these people worked.
See, you only need to work the equivalent of a part-time job for a minimum of 10 years to technically qualify for Social Security's retirement benefits. The Social Security Administration, however, will use up to 35 of your highest-earning years to calculate your eventual retirement payments.
The more and longer you work and the more you earn, the bigger your benefit becomes. The chart reflects folks with a wide range of work and earnings histories -- a fact that can help some and hurt others.
And the second footnote? The data illustrated in the table only shows the typical monthly payments being made to individuals who didn't claim benefits until they reached their full retirement age.
As you may know, the full retirement age -- or FRA -- is either 67 or 68 years of age (depending on the year you were born). That's just the age at which you'll receive 100% of your intended benefits from the Social Security Administration. However, you can retire as early as 62 if you're willing to accept up to a 30% reduction in your eventual monthly payments.
Conversely, by waiting until you're 70 years old to retire, you'll actually receive a bigger monthly payment than you would have by claiming benefits at the age of 67 or 68. The table ignores those folks who opted to take reduced benefits by retiring prior to turning 67 years of age.
With that as the backdrop, here it is: a breakdown of how many people are receiving a particular amount in Social Security retirement benefits every month.
Data source: Social Security Administration. Chart by author. Figures above $3,300 are omitted for greater visual clarity. Only 1.37 million individuals collect Social Security retirement benefits in excess of $3,300.
The data is eye-opening to be sure. While the average monthly payment may be $1,907 this year, the underlying numbers aren't exactly evenly distributed above and below that amount. Well over half of Social Security's beneficiaries are taking home markedly less than that number (although most of them are collecting at least $1,000 or more). However, there's also a clear swell of folks taking home on the order of $2,700 per month in Social Security retirement benefits.
There's a chance you could end up bringing home bigger-than-average retirement checks. This table can therefore be encouraging as well as discouraging, depending on your particular situation -- except it shouldn't really be either.
Some additional numbers to help fine-tune your plan
So how do you know where you'll wind up on this continuum? Well, you won't know exactly until you officially apply for retirement benefits from Social Security. The Social Security Administration, however, can offer you a projected monthly benefit based on your age, earnings, and work history thus far. Simply go to the My Social Security area of the administration's website. You'll need to establish an account, but they're free -- all you need is an email address.
To the extent it helps, the Social Security Administration's benefits calculator indicates that the individuals cashing monthly benefit checks of $1,900 now probably earned inflation-adjusted income (in today's dollars) of around $65,000 per year for at least 35 years. Anyone collecting payments of nearly $2,700 per month earned an inflation-adjusted salary of more than $100,000 per year for the same 35-year stretch. Annual earnings of $50,000 (again, in today's dollars) will result in future monthly retirement benefits in the ballpark of $1,600.
For the record, all of these numbers also assume you'll receive ordinary pay raises that reflect more work experience and your growing value as an employee. Keep in mind that these numbers may also ignore the impact of co-applying for benefits with a spouse, which could raise or lower the figures.
Looking beyond Social Security's benefits
Regardless of where you think you'll end up on the table, bear in mind that Social Security doesn't have to be your sole source of retirement income. In fact, it was never intended to be. The Social Security Administration itself says its retirement benefits typically only replace between 40% and 70% of an individual's pre-retirement, work-based income. The remainder should come from that person's own savings.
The good news is that it's possible to make up the remainder by saving for your own retirement, even with a modest income. The key is being disciplined enough to start as early as you can, and continuing to make contributions to your retirement fund, even when it isn't easy to do so. Even a small amount put to work is better than nothing.
And if you're nearer to your retirement date than not, your next best move is figuring out how much you're likely going to collect when the time comes. While the average of $1,907 per month is a decent-enough figure to work with when making bigger-picture future plans, for older investors it's time to start fine-tuning things. You may not be poised to collect that much, or you may even find you're due more than the overall average.
Whatever the case, just keep in mind your future Social Security payments are only a part of your financial future. What you do (or don't do) beyond your Social Security benefits could have a much greater impact on your eventual retirement budget.
