Old Couple
Source: Moodboard Photography via Flickr.

Social Security is a financial staple of retirement, providing much-needed benefits for tens of millions of Americans. But as important as it is to those retirees, Social Security doesn't pay the same amount to everyone. In fact, given how much your Social Security benefits depend on your earning history, there are very wide variations among Americans in the amount of the monthly Social Security check.

How does your Social Security stack up?
The Social Security Administration compiles data on how much it pays to program recipients, breaking down the population into hundred-dollar benefit ranges and counting how many people's monthly checks fall into each range. Overall, the average benefit was $1,294 as of December 2013, suggesting that most retirees receive a modest but substantial boost to their income from Social Security.

But  when you look at the breakdown of Social Security benefits across the population, you see a much different picture.

Ss Benefit Distribution All Retirees
Source: Social Security Administration.

These figures show the percentage of all retirees who fall into each hundred-dollar benefit range. When you go beyond broad average figures, you can easily see that even within the community of Social Security recipients, there are winners and losers.

Who's winning with Social Security?
At the very low end, you can see the impact that the progressive nature of Social Security benefits has on the payout range. Relatively few retirees receive less than $500 in monthly benefits, because at that range Social Security aims to pay 90% of your average indexed monthly earnings during your career. As a result, even minimum-wage and other low-income workers can quickly climb through the first few hundred-dollar levels.

But just above that level, there are a large number of recipients in the $700 to $900 range. At first, you might think this group reflects the spouses of retirees, whose spousal benefits usually amount to one-half of the worker's regular retirement benefit. But the SSA's data only include retired workers, separating out spousal benefits into another data set. As a result, the demographic bump in the $700 to $900 range reflects the substantial population of low- and middle-income recipients who must make do with small Social Security payments as a result of their work histories.

At the other end of the spectrum, the upper range of Social Security benefits has what statisticians call a long tail. Climbing well above the $1,294 average mark, you can see a very large group in the $1,300 to $1,700 range. Again, the progressive nature of Social Security benefits reduces how much more in monthly payments you get for every increase in average career earnings, so it makes sense to see a fairly abrupt drop-off once you exceed the $1,700 level.

Nevertheless, there is a retiree contingent of highly compensated individuals who rest far above the pack. Almost 99% of Social Security recipients get $2,500 or less monthly, so those from about $2,500 to the maximum benefit of $3,425 represent the top 1% of the country.

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Can you climb the Social Security ladder?
Unfortunately, it's tough to get much upward mobility within the Social Security ranks. Benefits are largely reliant on a recipient's individual work history, and so getting more out of them requires seeking out higher-paying jobs -- something that many people have little or no control over.

But one thing you do have more control over is when you start taking benefits. The longer you wait after reaching the minimum Social Security claiming age of 62, the bigger your payments will be, as you can avoid the penalties for early retirement and then earn additional credits for waiting up to age 70. For many, that's the best way to avoid having to settle for below-average Social Security payments that could leave you in financial difficulty later on in retirement.


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