For most retirees, Social Security income is a necessity to make ends meet. No fewer than 80% of then-current retirees in any given year rely on their Social Security check as either a “major” or “minor” source of income, according to more than two decades of annual surveys conducted by national pollster Gallup.
The amount each retiree receives can differ dramatically, depending on a number of factors. Let’s take an in-depth look at the items responsible for determining Social Security benefits, how much retired workers are taking home each month from ages 62 through 99 and over, and how future retirees can increase their eventual payout.
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Factors Determining Your Social Security Check
When it comes to calculating your Social Security check, the four factors considered are straightforward. Firstly, your earnings and work history, which are linked together. The Social Security Administration (SSA) takes into account your 35 highest-earning, inflation-adjusted years. The third factor is your full retirement age, also known as your “normal retirement age.” Lastly, your claiming age has the potential to meaningfully increase or lower your lifetime payout. Benefits can begin as early as age 62, but the program strongly incentivizes recipients to wait.
Average Social Security Retirement Benefit by Age
Now let’s take a closer look at the average Social Security retirement benefit by age, according to data provided by the SSA’s Office of the Actuary as of December 2023. The data is based on the age of retired workers and isn’t necessarily indicative of the age they claimed benefits. For instance, a retired worker receiving benefits at age 67 could have claimed their payout anywhere from ages 62 through 67.
| Age | Average Retirement Benefit | Age | Average Retirement Benefit |
|---|---|---|---|
| 62 | $1,298.26 | 81 | $1,943.00 |
| 63 | $1,338.65 | 82 | $1,942.41 |
| 64 | $1,459.73 | 83 | $1,920.50 |
| 65 | $1,563.06 | 84 | $1,882.72 |
| 66 | $1,739.92 | 85 | $1,864.04 |
| 67 | $1,883.50 | 86 | $1,833.70 |
| 68 | $1,948.37 | 87 | $1,779.58 |
| 69 | $1,945.18 | 88 | $1,755.44 |
| 70 | $2,037.54 | 89 | $1,752.01 |
| 71 | $2,050.67 | 90 | $1,757.84 |
| 72 | $2,023.00 | 91 | $1,781.97 |
| 73 | $1,990.43 | 92 | $1,769.78 |
| 74 | $2,000.45 | 93 | $1,763.11 |
| 75 | $2,012.14 | 94 | $1,762.84 |
| 76 | $1,982.36 | 95 | $1,769.85 |
| 77 | $1,996.49 | 96 | $1,773.24 |
| 78 | $1,949.44 | 97 | $1,753.36 |
| 79 | $1,942.45 | 98 | $1,761.40 |
| 80 | $1,940.24 | 99 and over | $1,715.05 |
Data source: Social Security Administration Office of the Actuary, as of December 2023. Table by author.
The variance in average retired-worker benefits by age is noticeable. Claiming age matters significantly — recipients at age 62 were receiving an average of $1,298.26 per month, compared to the average of $1,905.31 for all ages. Waiting until age 70 to receive benefits can boost your monthly payout by up to 32% compared to age 62 recipients.
Another noteworthy variance is the tapering off of average payouts at age 83 and above. This is due to the fact that women, on average, live longer than men. Historically, women have spent more time at home and less time in the labor force, impacting their pay and subsequent Social Security benefits.
Image source: Getty Images.
Patience is Key to Maximizing Benefits
Claiming age is the most important factor affecting your financial well-being during retirement. Deciding when to claim your Social Security benefit is crucial, and waiting until age 70 can lead to a substantial increase in your monthly payout. Understanding these age-old dilemmas is essential for retirees to make informed decisions about their financial future.
The Power of Timing: Maximize Your Lifetime Social Security Income
Receiving Social Security benefits at the optimal time could mean the difference between a modest retirement and a life of relative luxury. It’s the difference between relaxing on a beach somewhere and working as a greeter at a big-box retailer in your golden years.
The Findings
United Income recently conducted a study of 20,000 retired workers and their Social Security claiming behaviors. The results shed light on an alarming trend: most retirees are leaving money on the table by not optimizing the timing of their Social Security benefit claims.
The most striking revelation was that a vast majority of retirees would have increased their lifetime income by waiting to claim their benefits until after reaching full retirement age. In fact, the data showed that 57% of the retirees would have maximized their payout by waiting until the age of 70 to claim their Social Security benefits.
Conversely, only a combined 8% of the retirees would have optimized their lifetime payout by claiming at ages 62, 63, or 64.
The Do-over Clause: A Second Chance
While it may seem counterintuitive, the Social Security Administration (SSA) offers a little-known “do-over” clause for certain workers who regret taking their benefits early. Form SSA-521, or the “Request for Withdrawal of Application,” gives eligible workers a chance to undo their benefits claim and allow their payout to grow even further by as much as 8% per year until the age of 69.
Individuals who find themselves back in the workforce shortly after filing for retirement benefits may find this option particularly beneficial. It’s a rare second chance to reset and make the most of the payout in the long term.
However, there are limitations to this clause. The request must be filed within 12 months of receiving benefits, and workers can only utilize this mulligan once. Additionally, all benefits received, including those by spouses or children based on the individual’s earnings history, must be repaid. It’s a one-shot opportunity for those who think they may have jumped the gun.
The Overlooked Fortune
Unbeknownst to many, there are advantageous “Social Security secrets” that could significantly impact retirement income. Understanding these strategies could potentially translate into as much as a $22,924 bonus for retirees annually. By unlocking the hidden potential of Social Security, individuals can set themselves up for a more secure and enjoyable retirement.
If you’re like most Americans and have fallen behind on your retirement savings, these secrets could be a game-changer. By learning how to maximize Social Security benefits, retirees can gain a sense of financial confidence and embrace the peace of mind that comes with a well-prepared retirement.
Final Thoughts
The decision of when to claim Social Security benefits is a critical one and, often, a once-in-a-lifetime choice. As such, it’s essential to consider all available options and make an informed decision that will stand the test of time. By understanding the potential benefits of a delayed claim and the rare opportunity for a mulligan, retirees can secure a more financially stable and enjoyable future.
Ultimately, the key to unlocking the hidden potential of Social Security lies in making informed, strategic choices — choices that have the power to transform retirement from a modest affair to one of true financial security and comfort.
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