Many investors may know the average Social Security benefit for retirees currently stands at $1,976 per month. But that's an average with a wide range of inputs as well as potential outputs. The more money you earned during your working years, the greater your eventual payment becomes. The age at which you choose to initiate your benefits can also impact the size of your check.
With that as the backdrop, what's the average 75-year-old retiree collecting from Social Security these days? The agency reports it's $2,749 per month. For the sake of comparison, the typical 70-year-old is currently collecting $2,842 per month (the highest average age-based figure, by the way), while the average 80-year-old's monthly payment stands at $2,412.
Curiously, the 70-to-80-year-old crowd (born post-World War II, between 1945 and 1955) are seeing measurably bigger Social Security payments than the over-80 crowd as well as the under-70 crowd. The swell in the size of this cohort's Social Security payments suggests these so-called baby boomers enjoyed uniquely strong employment opportunities and subsequently strong incomes for almost all of their adult lives.
Not bad, but still not enough
So you're doing better than average, or you know you will be doing better when the time comes based on the Social Security Administration's projection of your future benefits? Don't celebrate too much, or too soon. This average payment still isn't covering the entirety of retirees' typical living costs.
Smaller payments don't necessarily spell doom, either. Plenty of people are generating more investment income from their retirement savings during their golden years even if they're collecting subpar Social Security payments.
And that's how it should be. The program was never meant provide all of your retirement income no matter how much or how little you put into it.
The bigger takeaway here is that you'll want to save as much as you possibly can for retirement on your own, and make the most of that savings while you can. This, of course, means achieving long-term gains that measurably and meaningfully outpace inflation.
