You could be leaving thousands of dollars on the table without even realizing it! Discover powerful strategies that could increase your Social Security benefits by as much as $22,924 annually. Whether you’re considering claiming benefits at 62 or waiting until 70, learning when to file is key to getting the most out of your retirement.
Understanding Your Social Security Benefits: What to Expect Each Month
For over 80 years, Social Security has been a lifeline for older Americans, helping them maintain a basic quality of life in retirement. In 2022 alone, the program helped 22.7 million people out of poverty, including 16.5 million adults aged 65 and older, according to the Center on Budget and Policy Priorities.
Despite its importance, the monthly benefit often isn’t as much as people expect. If you’re wondering what your monthly Social Security check will be, the amount depends on a variety of personal factors. Let’s take a closer look at how the Social Security Administration (SSA) calculates your benefit and break down the typical benefits by age so you can plan your retirement accordingly.
How Are Social Security Benefits Calculated?
The SSA uses four key elements to determine your monthly payout:
- Work History
- Earnings History
- Full Retirement Age (FRA)
- Claiming Age
These factors combine to shape your Social Security benefit.
- Work and Earnings History: The SSA calculates your average monthly earnings based on your highest 35 earning years, adjusted for inflation. If you worked fewer than 35 years, the SSA fills in the gaps with $0, which could lower your benefit.
- Full Retirement Age (FRA): Your FRA is the age at which you’re eligible to receive 100% of your benefit. For most people born after 1960, the FRA is 67.
- Claiming Age: The age at which you begin claiming Social Security plays a huge role in your monthly benefit. While you can start receiving benefits at age 62, waiting until 70 can significantly increase your payout. Each year you delay claiming benefits beyond age 62, your benefit increases by 8%.
What Is the Average Monthly Social Security Benefit?
As of May 2023, the average monthly benefit for retired workers was $1,916.63, or about $23,000 annually. However, the amount you receive will depend largely on when you begin claiming your benefits. Here’s a breakdown of the average monthly benefit by age for December 2023:
| Age | Average Monthly Benefit |
|---|---|
| 62 | $1,298.26 |
| 63 | $1,338.65 |
| 64 | $1,459.73 |
| 65 | $1,563.06 |
| 66 | $1,739.92 |
| 67 | $1,883.50 |
| 68 | $1,948.37 |
| 69 | $1,945.18 |
| 70 | $2,037.54 |
| 71 | $2,050.67 |
| 72 | $2,023.00 |
| 73 | $1,990.43 |
| 74 | $2,000.45 |
| 75 | $2,012.14 |
| 76 | $1,982.36 |
| 77 | $1,996.49 |
| 78 | $1,949.44 |
| 79 | $1,942.45 |
| 80 | $1,940.24 |
| 81 | $1,943.00 |
| 82 | $1,942.41 |
| 83 | $1,920.50 |
| 84 | $1,882.72 |
| 85 | $1,864.04 |
| 86 | $1,833.70 |
| 87 | $1,779.58 |
| 88 | $1,755.44 |
| 89 | $1,752.01 |
| 90 | $1,757.84 |
| 91 | $1,781.97 |
| 92 | $1,769.78 |
| 93 | $1,763.11 |
| 94 | $1,762.84 |
| 95 | $1,769.85 |
| 96 | $1,773.24 |
| 97 | $1,753.36 |
| 98 | $1,761.40 |
| 99+ | $1,715.05 |
Key Insights About Social Security Benefits
- Waiting Pays Off: As seen in the table, delaying your claim until age 70 can result in a much higher monthly payout. Someone who waits until age 70 can receive 57% more than if they started claiming benefits at age 62.
- Early Claims Mean Lower Benefits: Claiming Social Security at age 62 means you’ll face a reduction in your monthly benefits, ranging from 25% to 30% less than what you’d get at your Full Retirement Age.
- Benefits May Plateau After 83: After age 83, Social Security benefits tend to stabilize or slightly decrease, particularly among women, as they often have lower lifetime earnings due to taking time off to care for children.
How to Boost Your Social Security Benefits
While Social Security wasn’t designed to replace all your retirement income, there are strategies to maximize your monthly payouts:
- Delay Your Claim: The easiest way to increase your benefits is to wait. Each year you postpone claiming after age 62 increases your monthly benefit by 8%, up until age 70.
- Use the SSA-521 Form: If you regretted filing for benefits too early, there’s a little-known option called the SSA-521 (Request for Withdrawal of Application). This form allows you to withdraw your claim within a year, giving you the chance to delay benefits and earn a larger payout when you reapply.
- Tailor Your Strategy to Your Situation: The right claiming strategy depends on many factors, including your health, marital status, and financial needs. For example, if one spouse has a much lower earnings history, it might make sense for that person to claim early while the higher-earning spouse delays benefits for maximum household payout.
Maximizing Your Social Security: The $22,924 Boost
Many retirees are unaware of strategies that could increase their Social Security payout by as much as $22,924 per year. These strategies involve understanding the Social Security system and leveraging opportunities to maximize your lifetime benefits. To ensure you’re getting the most out of Social Security, it might be worth consulting a financial planner or looking into resources that specialize in Social Security optimization.
