For a majority of the more than 53 million retired-worker beneficiaries who received Social Security income in October, their payout is a necessity, not a luxury.
Over the last 24 years, national pollster Gallup has surveyed retirees to gauge the importance of the income they receive each month from Social Security. Between 80% and 90% of respondents have deemed it necessary, in some capacity, to make ends meet.
These annual polls underscore the importance of getting as much as possible out of Social Security for future generations of retirees.
But to maximize your monthly and/or lifetime payout from America's leading retirement program, you'll first need to understand the nuts and bolts of how your benefit is calculated. Only then does it become apparent how important your claiming is, and how much of an impact an early (age 62), middle-ground (age 67), or late (age 70) claiming approach can have on your monthly payout.
Image source: Getty Images.
These four factors are used to calculate your monthly Social Security check
The four factors used by the Social Security Administration (SSA) to calculate your monthly benefit are straightforward. In no particular order, these variables are your:
- Work history
- Earnings history
- Full retirement age
- Claiming age
These first two factors are effectively intertwined. When determining how much you'll be paid monthly during retirement, the SSA accounts for your 35 highest-earning, inflation-adjusted years. In theory, if you have a well-paying job spanning multiple decades, you have a decent chance of receiving an above-average retired-worker payout.
However, there is a caveat to this calculation. For every year less than 35 worked, the SSA will average a $0 into your calculation. If you have any intention of maximizing your monthly or lifetime benefit, you'll need to have at least 35 years of qualifying work history.
The third element is your full retirement age, which represents the age you become eligible to receive 100% of your monthly benefit. Since your full retirement age is determined by your birth year, it's the only item on this list that you have no control over.
The final factor responsible for swinging the proverbial payout pendulum is your initial collection age. Although retired workers have the option of claiming their benefits as early as age 62, there's a financial incentive to be patient. For every year a retired worker waits to collect their benefit, beginning at age 62 and continuing until age 70, it can grow by as much as 8%. You can see how this dynamic plays out in detail in the following table.
| Birth Year | Age 62 | Age 63 | Age 64 | Age 65 | Age 66 | Age 67 | Age 68 | Age 69 | Age 70 |
| 1943-1954 | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% | 132% |
| 1955 | 74.2% | 79.2% | 85.6% | 92.2% | 98.9% | 106.7% | 114.7% | 122.7% | 130.7% |
| 1956 | 73.3% | 78.3% | 84.4% | 91.1% | 97.8% | 105.3% | 113.3% | 121.3% | 129.3% |
| 1957 | 72.5% | 77.5% | 83.3% | 90% | 96.7% | 104% | 112% | 120% | 128% |
| 1958 | 71.7% | 76.7% | 82.2% | 88.9% | 95.6% | 102.7% | 110.7% | 118.7% | 126.7% |
| 1959 | 70.8% | 75.8% | 81.1% | 87.8% | 94.4% | 101.3% | 109.3% | 117.3% | 125.3% |
| 1960 or later | 70% | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% |
Data source: Social Security Administration.
What's the average Social Security benefit at ages 62, 67, and 70?
Despite these wide variances in monthly payouts, every age within the traditional claiming range of 62 through 70 offers unique advantages and drawbacks. But among these traditional initial collection ages, none are likely to be more popular in the years to come than 62, 67, and 70.
Let's briefly examine why these three claiming ages should grow in popularity, as well as take a closer look at how much the average retired-worker beneficiary is taking home each month at 62, 67, and 70.
- Why collect at age 62? The attraction of collecting at the earliest possible claiming age is not having to wait to receive your benefits. An early filing may also be palatable if you believe Social Security benefits will be cut by 2033, as the Social Security Board of Trustees has forecast. Conversely, collecting at 62 means accepting a permanent monthly payout reduction of up to 25% to 30%, depending on your birth year, and can expose you to the retirement earnings test.
- Why collect at age 67? The reason 67 is about to explode in popularity as a claiming age is that it represents the full retirement age for anyone born in or after 1960 (i.e., the lion's share of today's labor force). Initially collecting at 67 ensures you'll receive no less than 100% of what you're owed. The potential downside of this middle-ground approach is that you could leave a significant amount of lifetime Social Security income on the table if you live well into your 80s and beyond.
- Why collect at age 70? The advantage of waiting until age 70 to collect your retired-worker benefit is it allows you to maximize your monthly payout. Depending on your birth year, you'll receive 24% to 32% more per month than what you would have at full retirement age. On the other hand, it's uncertain if waiting eight years, following your initial eligibility to collect your retired-worker benefit, will also maximize your lifetime income.
With a clearer understanding of what drives retirees to claim their payouts at these three ages, let's take a closer look at the average monthly check at 62, 67, and 70.
Every year, the SSA's Office of the Actuary publishes a data set that breaks down the average retired-worker payout for every age from 62 to 99-plus. Keep in mind that this breakdown is based on the age of a recipient at the time the data is gathered and, with the exception of age 62, isn't necessarily indicative of their claiming age.
As of December 2024, a little over 594,000 aged 62 retired-worker beneficiaries brought home an average check of $1,207.03. Meanwhile, nearly 3 million retired workers received an average of $1,719.20 at age 67. Lastly, close to 3.18 million aged 70 retired-worker beneficiaries banked an average payout of $1,909.42.
On average, retired workers aged 70 received 58% more per month than those aged 62, as of December 2024.
Image source: Getty Images.
Statistically, one claiming age is superior to others
Although every claiming age has its pros and cons, there is, statistically, one initial collection age that offers future retirees the highest probability of maximizing their lifetime income collected from Social Security.
In 2019, researchers at United Income published a report ("The Retirement Solution Hiding in Plain Sight") that examined the claims of 20,000 retired workers using data from the University of Michigan's Health and Retirement Study. Their analysis was designed to see which claiming ages were optimal. In this context, an "optimal" claim is one that would have maximized the lifetime Social Security income collected by a retired worker.
Unsurprisingly, United Income's analysis found that very few (just 4% of the 20,000 claimants studied) retired-worker beneficiaries had made an optimal claim. Since none of us knows when we're going to die, there's always going to be some level of educated guesswork involved when claiming retired-worker benefits.
Furthermore, we all walk a unique path to reach retirement. Since everyone's variables are different, including financial needs, tax implications, marital status, personal health, and so on, there is no one-size-fits-all blueprint regarding initial benefit claims.
However, researchers did make one stunning finding that demonstrated the value of patience.
According to United Income, actual retired-worker claims and optimal claims were near-perfect inverses of each other. For example, while 79% of the 20,000 workers examined collected their payout at ages 62, 63, or 64, only 8% of all optimal claims were traced to these three ages, combined.
In comparison, very few of the claimants studied waited until age 70 to begin receiving their Social Security income. But United Income found that a whopping 57% of these 20,000 beneficiaries would have maximized their lifetime income by holding off until 70 to collect.
Mind you, United Income's study doesn't mean that every future retiree is going to maximize their lifetime income by waiting until 70. There are viable reasons to collect early, such as if you have a chronic illness that can shorten your life expectancy.
But when this grouping of 20,000 claimants is analyzed as a whole, it highlights the value of waiting for a majority of future retirees.
