Get ready -- in just 11 years, Social Security will be celebrating its 100th birthday! For now, we can celebrate that it has been around for 89 years, keeping millions of Americans out of poverty. Today, it supports more than 71 million Americans, with payments totaling nearly $1.5 trillion per year.
You might wonder what the average benefit is for someone of an average retirement age. Here's your answer: The overall average monthly Social Security retirement benefit was $1,919 as of July. That's about $23,000 annually -- for this year. (Remember that Social Security benefits are increased nearly annually, via cost-of-living adjustments (COLAs).
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Social Security benefits are not a case of you-get-what-you-get, though. There are ways to increase your Social Security benefit checks -- such as by delaying starting to collect them, which you can do up to age 70. (You can start collecting as early as age 62, by the way.) For most folks, the best strategy is to wait until age 70, but many people can't do so because they simply need that income as soon as possible.
So what's the average monthly benefit for someone who's, say, 65? At the end of 2023, it was $1,563, or about $18,750 for the year. Yikes, right? Before you start getting too anxious, remember that if you've earned more than average during your working life, your benefits should be above average, too (the maximum monthly benefit tops out at $4,873 for 2024).
You can get an estimate of how much you can expect from Social Security by setting up a my Social Security account at the Social Security Administration website. It will allow you to see the latest estimates of your future benefits.
It's smart to be thinking of Social Security well before you retire -- and also to develop a thorough retirement plan. Each of us should be estimating how much income we'll need in retirement and how we'll get it. Social Security isn't likely to be enough, so explore and develop other retirement income sources.
