Social Security is a constant for millions of older adults. Once you file for benefits, you'll receive a monthly payment for the rest of your life.
But the program isn't the same today as it was in the past, and a lot has changed over the last 20 years. The average worker today receives far more per month than in 2004, but there are some major challenges plaguing the program, too.
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In 2004, the average retired worker collected $955 per month, according to historical data from the Social Security Administration. As of July 2024, the average benefit has jumped to $1,919 per month among retired workers.
Other figures, such as the maximum benefit amount, have also shifted. In 2004, individuals filing at their full retirement ages could earn a maximum of $1,825 per month. Today, the maximum benefit at age 67 is $3,911 per month.
On the surface, it may seem as if today's retirees are far better off financially. However, while beneficiaries are receiving more money per month, those benefits aren't going nearly as far.
Since 2010 alone, Social Security has lost 20% of its buying power, according to a 2024 report from The Senior Citizens League. Also, while the annual cost-of-living adjustments (COLAs) are designed to help benefits keep up with inflation, 8 out of the last 15 COLAs fell short of the inflation rate for that year, the study revealed.
There's nothing wrong with relying on Social Security in retirement, but it's wise to keep your expectations in check. When you know how far your benefits will go (and are aware that your payments may continue losing buying power in the future), you can take steps to better protect your retirement.
