Patience often pays off. That's true whether we're talking about fishing, gardening, or learning something new. And it's definitely applicable to the decision about when to claim Social Security retirement benefits.
All Americans born in 1960 or after will receive lower monthly checks if they begin collecting Social Security retirement benefits before reaching their full retirement age of 67. How much you receive depends on several factors, but the Social Security Administration (SSA) provides updated average benefits by age each year.
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Full retirement age, full benefit
As of the end of December 2023, the average monthly Social Security benefit for retired workers aged 67 was $1,883.50. This amounts to $22,602 per year.
The averages differ based on the sex of the beneficiary, though. Men aged 67 received an average of $2,903.70 per month ($34,844.40 per year), while women aged 67 received an average of $1,676.20 per month ($20,114.40 per year).
The average monthly retirement benefit at younger ages is significantly lower. For example, 62-year-olds received only $1,298.26 per month ($15,579.12 per year). Retired workers aged 65 received an average monthly check of $1,563.06 ($18,756.72 per year).
These lower averages aren't surprising because SSA applies an early retirement penalty. Benefits are reduced by five-ninths of 1% for each month before a person reaches his or her full retirement age for up to 36 months. The penalty for retiring earlier than 36 months before the full retirement age is five-twelfths of 1% per month.
A few wrinkles with the Social Security average
Mark Twain popularized the saying, "There are three kinds of lies: lies, damned lies, and statistics." While I wouldn't categorize the above Social Security statistical average as a lie, there are a few wrinkles to note with the figure.
Importantly, the average doesn't only include retired workers who wait until age 67 to begin receiving benefits. It reflects the average benefits for all retired workers age 67, including many individuals who retired at an earlier age.
The average monthly benefit for retired workers age 67 is also undoubtedly higher than $1,883.50 today. Because SSA's data is from December 2023, the numbers don't include the impact of the Social Security cost-of-living adjustment (COLA) of 3.2% that went into effect in January 2024.
Remember, too, that any retirees who began receiving Social Security benefits in 2024 could skew the average. If the lifetime earnings of these workers are higher than the lifetime earnings of previous Social Security beneficiaries, the average monthly benefit for 67-year-olds could be pushed even higher.
How to beat the average
You don't have to settle for the average monthly benefit for 67-year-olds, though. There are a couple of ways to beat this average.
The easiest alternative is to hold off on collecting your retirement benefits. SSA will increase your benefit by two-thirds of 1% per month (or 8% per year) that you delay receiving benefits up to age 70. Waiting three years could boost your retirement benefit by 24%.
Another option is to increase your earnings. SSA uses your 35 years with the highest earnings to calculate your retirement benefit. What if you've already begun receiving benefits? No problem. If you return to work and make more than you did earlier in your career, it could still result in SSA increasing your benefit.
