If you’ve been receiving your Social Security retirement benefit for a while now, you may be curious how your check compares with others.
And if you haven’t yet started receiving it, you might want to know what to expect — and what might affect this amount.
Lucky for you, the Social Security Administration (SSA) publishes extensive statistics on all beneficiaries and payouts in the U.S. When comparing your benefit to others’, though, keep in mind that the size of your monthly payout primarily depends on four factors: how many years you worked, your income during those years, your full retirement age (FRA) and the age at which you choose to start receiving benefits.
Average benefit for retired workers aged 62, 66 and 71
The SSA provides assistance to many groups of people, not only to retired workers. Spouses, disabled people and minor children of deceased workers may receive benefits, too.
For this article we’ll concentrate on those who received retired-worker benefits, which accounted for approximately 74% of the SSA’s beneficiaries, as of December 2022.
The average monthly benefit for retired-worker beneficiaries at the time was:
$1,274.87 for 62-year-olds
$1,719.85 for 66-year-olds
$1,946.34 for 71-year-olds
Benefit size is based in part on your age when you file
Your FRA is the age when you become eligible to receive your full Social Security retirement benefit; it’s based on your date of birth. For example, if your date of birth falls between 1943 and 1954, your FRA is age 66. From 1955 to 1960, the FRA increases gradually in monthly increments. You can determine your FRA using the SSA’s retirement age calculator.
You can choose to start collecting your retirement benefit before or after your FRA, but this will affect the size of your check. Filing early means you’ll have a reduced monthly payout — and that reduction is permanent. For example, if you start collecting benefits at age 62 in 2023, your benefit will be about 30% lower than if you wait until you reach your FRA of age 67. If you wait until age 70 to claim your benefit, you could earn even more each month.
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Your check is based on your previous income
You’re eligible to receive retirement benefits if you’re 62 or older and you’ve paid Social Security taxes for 10 years or more. Your benefit is calculated based on the average income earned during your 35 highest-earning years, indexed for wage inflation.
If you’re planning to retire early but don’t have 35 years of work under your belt, you may want to reconsider. When the SSA calculates your payout, any year you haven’t worked is counted as an income of zero — this could significantly reduce the benefit you’re eligible to receive.
That’s because Social Security is designed to replace a portion of your average income over 35 years. Low earners who start their benefits at full retirement age will receive about 75% of their average pre-retirement income, while medium earners will receive about 40%, according to the SSA. High earners will receive about 27%; however, there is a [maximum amount](https://moneywise.com/retirement/maximum-social-security-benefit you can receive.
But there may be good reasons to start collecting earlier
Although your check will be larger if you wait, there are several reasons why you might start collecting benefits before your FRA. For example, you may need the money for day-to-day expenses if you retire at 62 or earlier, or you may need the money to pay off high-interest debt. If you or your spouse have health issues or you don’t expect to live to 70, your total benefits may be greater if you start collecting earlier.
Indeed, many people make the decision to start collecting retirement benefits before they reach their FRA. In 2022, the average age when retirees were awarded benefits was 65.2 for men and 65.1 for women, according to the SSA. Among male benefit recipients in that same year, almost half (49.3%) started their benefits before their FRA; among female benefit recipients, the proportion of early claimants was even higher: 51.8%.
If you haven’t claimed your retirement benefit yet, talk to your financial adviser about whether it makes sense to file before or after your FRA to maximize your benefit.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.