Social Security accounts for a large part of many retirees' finances. It's helpful to get a sense of how much you can expect, so you can plan and budget properly.
Monthly benefit amounts will vary widely, but knowing the average amount at certain ages can give you a useful reference point to estimate your benefits accordingly.
As of the end of January, the average monthly benefit for Social Security retired workers benefits was $1,979 (rounded to the nearest dollar). For 72-year-old recipients, the monthly benefit was higher, at $2,023.
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What determines how much you receive in Social Security?
Your Social Security monthly benefit amount comes down to your lifetime earnings and when you claim benefits.
As far as lifetime earnings go, think of it like this: The more you earn in your lifetime, the higher your monthly benefits. This is because higher earners pay more in Social Security payroll taxes, so they're "owed" higher benefits in retirement.
The only exception is those who earn above the wage base limit, because income above that limit isn't subject to Social Security payroll taxes and doesn't further increase your benefits.
Regarding when you claim, monthly benefits are either reduced or increased, depending on whether you claim before or after your full retirement age (FRA).
Your FRA is the age at which you're eligible to receive your primary insurance amount, which you can think of as the starting point for your monthly benefit. Social Security uses that amount and then reduces or increases it accordingly.
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The average benefit for 72-year-olds being higher than the average for all recipients can be attributed to those individuals either having higher lifetime earnings or delaying claiming benefits.
Delaying benefits past your FRA increases them by 2/3 of 1% monthly, until you turn 70. After 70, benefits are no longer increased, so that's generally the latest anyone claims Social Security.
