The Average American's Social Security Benefits by Age

The average Social Security benefit for a retired worker is $1,347, but most Americans draw Social Security before full retirement age. While there's no clear best age to collect Social Security, benefits increase significantly for waiting, as you can see from the averages.

• Age 62: $1,046
• Age 65: $1,152
• Age 66: $1,338
• Age 70: $1,433

Average Social Security benefits by age

Here's a thorough breakdown of average Social Security benefits by age, as of December 2015.

Data source: Social Security Administration.

A couple of things to keep in mind. First, these are overall averages -- not the average benefits for people who started collecting Social Security at these ages. In other words, the average 70-year-old's benefit includes the 45% of Americans who filed at 62 and had their benefit permanently reduced. Based on the delayed retirement increase rate of 8% per year, the average American who waits until 70 likely has a benefit several hundred dollars greater than this data indicates.

Also, notice that the third column is labeled Average Spousal Benefit, which is important to include since it represents a significant portion of beneficiaries in the 62 to 70 age group. If you're not familiar with spousal benefits, here's a 30-second explanation:

If you didn't earn much during your lifetime, or earned a disproportionately small amount relative to your spouse's earnings, you are guaranteed a minimum of one-half of their full retirement benefit. You can start collecting a spousal benefit as early as 62, and just like normal retirement benefits, it is reduced for filing early. However, if you notice the big jump in spousal benefits from ages 65 to 66, it appears that most spouses wait until full retirement age to start collecting. Obviously there is more to spousal benefits than can be discussed in a paragraph, so for a thorough explanation of spousal benefits, here's an article on the subject.

How to estimate your benefit, and the effect of waiting

To determine your Social Security benefit at full retirement age, also known as your primary insurance amount (PIA), the Social Security Administration averages you 35 highest-earning years indexed for inflation, and then applies a benefit formula to your monthly average. You can attempt to calculate your PIA manually if you wish, using this worksheet.

Better yet, the easiest way to get an accurate estimate of your benefits is to create an account on www.ssa.gov and view your most recent Social Security statement. Not only will you find your estimated benefit at full retirement age, but you can also see the effect of claiming at ages 62 or 70, as well as information about other potential Social Security benefits programs.

Image source: Social Security Administration

However, you'll notice from the sample Social Security statement above that it only provides estimates for three ages -- 62, full retirement age, and 70. If you want to estimate your benefits at any other age, here's what you need to know:

• For early retirement, your benefit will be permanently reduced by 6.67% for every year before full retirement age, up to three years. On a monthly basis, this is 5/9 of 1%.
• Beyond three years early, your benefit is further reduced by 5% per year, or 5/12 of 1% per month.
• If you delay Social Security beyond your full retirement age, you'll receive a permanent increase of 8% per year, or 2/3 of 1% per month.

Theoretically, it's all the same

As a final thought, it's important to mention that the reason for reduced or increased benefits is that (theoretically) you should receive the same amount over your lifetime regardless of when you file for benefits.

However, this is based on the SSA's actuarial data on how long the average retiree will collect benefits. Everyone's situation is different, so you should assess your own financial condition, health, and retirement income goals in order to make the best decision for you. For example, if you're in excellent health, have a history of longevity in your family, and don't need the money immediately, it may be in your best interest to wait and maximize your benefits. On the other hand, if you need the money sooner, aren't in excellent health, or simply don't feel like waiting, there's nothing wrong with filing early.