How much Social Security income are people getting these days? There's no specific answer.
It depends on how much taxable income someone earned during their working years, how many years they worked, and how old they were when they initiated benefits. Since all of these inputs are at least slightly different for each and every individual, everyone's payments are also a little bit different.
There are averages, however, that can give you a pretty good idea of how the typical beneficiary is currently faring, or a rough idea of what you can expect then. To this end, here's a look at the average monthly Social Security payment for 70-year-old recipients right now.
The average 70-year-old's number
The figures cited here are supplied by the Social Security Administration, and are as of June of this year. And there's more than one. The average is, of course, the one that paints the broadest and most meaningful picture. To this end, today's 70-year-olds are receiving an average monthly Social Security retirement benefit of $2,187.50.
The figure is slightly less for women at $1,947.74, by the way, and slightly more for men at $2,431.17. It's also more for non-dually entitled workers at $2,246.76 per month, and markedly less at $1,670.91 for dually entitled individuals. (Note that dually entitled workers' payments are typically smaller because these recipients were or are married to a spouse that's also receiving Social Security benefits of their own, whereas non-dually entitled beneficiaries only receive benefits based on one spouse's work record. On a combined basis, dually entitled recipients are still collecting more than non-dually entitled households, reflecting their greater combined lifetime incomes.)
Curiously, this current average of $2,187.50 represents the highest average of all age groups. Beneficiaries at the age of 69 are only receiving $2,052.44, and the number gets progressively smaller as you near the lowest-possible claiming age of 62. Yet, 71-year-olds are only receiving $2,157.27 worth of Social Security benefits every month, and that number also declines the older the beneficiary in question.
Data source: U.S. Social Security Administration. Chart by author.
What gives? Timing has a lot to do with it. That's because most of today's 70-year-olds were born in 1955, which would have put them into the workforce between the mid-1970s all the way through the mid-1990s (if not later).
Although this was a period of strong economic growth for the country, it was also a period where wages and wealth growth for average middle class Americans didn't exactly soar. Most of today's 70-year-olds would have been at the highest-earning points of their careers at this point in time, however, so it's possible they escaped the brunt of this challenge.
It's also worth noting that career longevity -- and even life longevity -- were both extended during the 80s and 90s, allowing individuals around this age to earn more Social Security-taxable income for longer than the sub-generations immediately before them did.
Whatever the reason, something clearly worked then to the average 70-year-old's advantage today.
How Social Security payments are calculated
And the number raises an important question from everyone else. That is, how exactly did today's 70-year-old retirees qualify themselves to receive their monthly Social Security payment of $2,187.50?
Answer: Just like everyone else has or is determining their particular benefit. It's a function of three specific factors. The first of these factors is earnings. The more money you make as an employee, the more in Social Security taxes you pay, but the more you get back when the Social Security Administration calculates your benefits payments.
There are limits to both amounts, of course. This year, the Social Security program only taxes up to your first $176,000 in work-based wages, since taxing you more would be of no additional benefit to you. In this vein, the maximum possible Social Security benefit anyone's getting this year is $5,108 per month, and not many people are getting that much.
Just remember: the more you earn on the job, the more you get back in benefits.
Image source: Getty Images.
The second factor that impacts everyone's current or future Social Security benefits payments is the number of years you earned a work-based income. When it's figuring out what it owes you, the Social Security Administration looks at your 35 highest-earning (adjusted for inflation) years.
That doesn't mean you have to work 35 years, to be clear. In fact, most people don't. You can work less and still claim benefits. The program simply assigns you $0 for every year less than 35 that you earned job-based income, ultimately lowering the size of your eventual payment.
Finally, the third factor that determines the size of your Social Security payment is the age at which you initiate your benefits. You can claim benefits as early as the age of 62. However, doing so will reduce your payments by as much as 30% compared to what you would have received by waiting to file at your official full retirement age somewhere between the ages of 66 and 67.
Conversely, waiting until you reach the age of 70 before filing for Social Security benefits can add more than 25% to the monthly payment you would have received if claiming at your full retirement age.
Today's 70-year-olds cashing average monthly checks of $2,187.50 didn't all necessarily do this. Certainly some of them did, though, which would help at least partially explain why this group's Social Security payments are measurably better than most everyone else's.
