This article was updated on Feb. 19, 2016.
Nearly 60 million Americans get benefits from Social Security, and the Social Security Administrations pays out more than $73.5 billion in benefits every month to retirees, disabled workers, and their families. Out of that amount, more than 43 million Social Security recipients get retirement benefits, and with the government making about $55.7 billion in monthly payments, that amounts to an average of $1,295 per month for every person getting Social Security benefits on a retired worker's work record. Yet many families have trouble making ends meet on the Social Security payments they receive, and it's easy to think that other people are getting more from Social Security than you are. Moreover, workers themselves tend to get a lot more in benefits than their family members claiming on their work record, showing how Social Security's methodology treats various people quite differently.
To help you see where you stand compared to your peers, we've gone straight to the source to find out how much the average American gets from Social Security. What you'll see below should give you a better sense of whether you're ahead of the curve or struggling more than the average person.
What the typical retired worker gets
The mainstay of the Social Security system is the retired worker. With almost 40 million retirees taking benefits on their own work records, this Social Security benefit makes up more than 70% of the total money that the SSA pays out in benefits.
The average retired worker received $1,340 in the most recently reported month, according to the SSA. That's up from $1,305 as of late 2014, reflecting the slight increases in cost-of-living adjustments that took effect at the beginning of 2015.
In addition to those retiree benefits, Social Security also makes payments available to spouses and certain qualifying children of retired workers. As you can see from the numbers above, the numbers of people receiving spousal and children's benefits are relatively small, and the dollar amounts are just a tiny fraction of what workers receive for their own account.
On average, the typical spouse receives just $689 in monthly spousal benefits, or roughly half what the worker gets. Children on average get $650 per month, but again, that only includes the 645,000 children eligible to receive those benefits.
How to make your Social Security payment bigger
As small as those spousal and children's benefit figures are, they make sense in light of the typical Social Security payment for retired workers. The SSA determines the amount that spouses and children get by using half of the worker's full-retirement amount as a starting baseline. Moreover, spouses and children are both subject to family maximums that limit the total monthly benefits that a family receives to between 150% and 180% of the worker's full retirement benefit. In larger families, those limits can serve to cut the amount each child receives, reducing average benefits by an even bigger amount.
For workers, two main factors affect their benefits: how much they earn and when they start taking their monthly benefits. Most people find it impossible to boost their earnings through working more, although working longer can sometimes lead to a benefit increase because of the 35-year work history that the SSA looks at in figuring your benefit.
The decision that plays the biggest role in how much you get, though, is the age when you claim Social Security. More than half of retirees take Social Security benefits right at age 62, when they first become eligible. Only about 20% waited at least until full retirement age of 66, with only a small portion of those waiting beyond 66.
Yet waiting can give you a big boost in your monthly benefits, albeit at the price of missing out on the early payments you'd get by claiming early. As you can see below, someone with a $1,000 benefit at full retirement age gets only $750 by claiming at age 62, but can get as much as $1,320 by waiting until age 70.
Similarly, spouses who claim spousal benefits before full retirement age can reduce their benefits further. Unfortunately, spouses aren't entitled to delayed retirement credits beyond full retirement age, so there's no benefit from waiting beyond age 66 to take spousal benefits.
No one wants to be below average when it comes to their Social Security benefits. Weighing your options and considering not taking your benefits as soon as possible might make the difference between making the grade and coming up short.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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