When planning for retirement, it's a good idea to think about how much money you'll need, and also how much you'll realistically be able to save. While it can be hard to know what your retirement fund will look like, given that you may take multiple jobs with different benefit packages throughout your career, there is a lot of available data on Social Security, which could be a key part of your retirement savings.
Social Security benefits vary by the age you retire, and there's an annual cost-of-living adjustment, so benefits now are likely lower than they'll be when you'll retire. But you can factor in these assumptions once you have a good starting point. Here's the average Social Security benefit at age 65.
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Falling shy of fully entitled benefits
Social Security benefits are calculated based on a retiree's age, earnings throughout their career, and how many years they worked and paid Social Security taxes. Retirees also get to choose when they claim Social Security. Typically, retirees can claim benefits as early as age 62 and as late as age 70. The catch is that the earlier someone claims benefits, the less they are eligible for.
The full retirement age (FRA) is the age at which a retiree qualifies for the full amount of benefits they are eligible for. The FRA is 67 for those born in 1960 or after. So, if a retiree claims Social Security at 65, they will claim anywhere from 87.2% to 92.8% of their fully entitled benefits, depending on what part of their 65th year they file to claim. The deduction in benefits is calculated based on the number of months a retiree claims benefits prior to their FRA.
The average Social Security benefit of retired workers in February was about $1,981. This means the average Social Security check at age 65 will range from $1,727 to $1,838, or a middle point of about $1,783 per month and $21,396 annually.
