Social Security was never intended to provide the entirety of anyone's retirement income. The fact is, however, that many of the program's beneficiaries are doing reasonably well with it. Indeed, some are doing great.
How well? That's largely a factor of age. Just for the record though, current 72-year-olds are among those collecting the biggest monthly Social Security payments.
Here's the typical 72-year-old's Social Security payment
Given that the average monthly payment for all retirees currently stands at $1,976, it would be easy to understand if your expectations of the entitlement program's payouts were low.
That overall figure doesn't quite tell the whole story though. The number's being weighed down by beneficiaries who claimed benefits well before their official full retirement age (or FRA), and as such are collecting considerably less than they could be.
The average monthly payment is also dragged even lower by beneficiaries currently in their 80s who -- by virtue of being born during or just before World War II -- may have suffered subpar wages and even prolonged unemployment during some of their prime working years. This, of course, means they contributed less to Social Security than their children did beginning just a decade later.
Regardless of their differing circumstances, as The Motley Fool's in-house research arm has determined, the average 72-year-old is collecting a monthly check of $2,786. That's still not huge to be sure, but it's measurably better than the overall average. Most of Social Security's beneficiaries between the ages of 70 and 75 are doing similarly well, not to mention doing measurably better than the sub-70 as well as the 80-plus cohorts.
The new norm
What gives? Why is this narrow band of retirees collecting bigger checks than the crowd older and younger than them?
As was noted, luck had at least a little something to do with it. Folks born in the U.S. between 1950 and 1955 -- the heart of the baby boom -- became adults during a time of tremendous and prolonged economic growth. As such, they were likely to be relatively strong earners for the majority of their working years. That wasn't quite the case for their parents, aunts, and uncles. People born slightly before or after that five-year stretch did pretty well for themselves too, to be clear. But those born within this narrow window were perfectly timed to benefit from the peak of post-war prosperity.
They were also born at a time right as great strides were made in medicine. Not only did this allow them to live longer, it allowed them to work longer, too, and contribute more money to Social Security on their own behalf.
Whatever the reason they're collecting above-average benefits today, on its own Social Security payments still don't provide enough income for a retiree to live on comfortably. However, the 70-to-75 cohort also saved and invested for retirement on their own.
How much? The Social Security Administration reports that in 2023, the average retiree between the ages of 65 and 74 had an income of $72,190 (or $6,015 per month), less than half of which would have come from the government-administered benefits program. The rest would have stemmed from pensions and personal retirement savings. Most of this income, of course, was spent on basic needs like food, housing, and healthcare.
That dynamic isn't apt to change in the foreseeable future either.
