The average Social Security benefit amount for a retired beneficiary at age 65 was $1,525 per month in June 2023, according to the Social Security Administration (SSA).Your benefit depends on your earnings during your working years, your age at retirement, cost-of-living increases and whether you have a pension.
» MORE: See when you qualify for Medicare
Why retirement age matters
Retiring at 65 is often considered "early" retirement for Social Security benefits. Most people can’t receive 100% of their Social Security retirement until they turn 66 or 67, depending on their full retirement age.
The SSA bases your full retirement age on the year you were born. If you retire earlier, the SSA will permanently reduce your benefits, but it’ll permanently increase your benefits if you wait until after you reach full retirement age to retire. Although other factors affect your monthly Social Security benefit, the first thing the SSA looks at is your age.
How much money you might lose by retiring at 65 depends on what your full retirement age is. The more time between when you retire and your full retirement age, the greater the reduction. For example, if you can earn 100% of your Social Security benefits when you are 66 years and 4 months old, the SSA will reduce your benefits by more if you retire at 65 years and 6 months than if you retired at 65 years and 10 months.
Estimate your Social Security retirement benefits
Your actual benefit may be lower or higher than estimate made with this calculator, because it does not take into account your actual earnings history.
We assume you have earnings every year until you begin receiving Social Security benefits. If you had several years of noncovered employment or your earnings changed significantly from year to year, this calculator will overestimate or underestimate your benefit.
» MORE: How much can you earn while on Social Security?
What happens if I retire before age 65?
You're eligible to start receiving Social Security at age 62, but that choice may reduce your monthly benefit by as much as 30%. The upside of early retirement is that you'll receive benefits for more total years than if you wait.
You'll receive your largest possible monthly benefit if you wait until you're 70 to claim Social Security, but you'll have fewer total years of receiving benefits. So before deciding, consider your current and future financial needs, health and life expectancy.
» MORE: Should you take Social Security at 62, 67 or 70?
🤓Nerdy Tip
Did you know that Medicare Part B premiums are usually automatically deducted from your Social Security retirement checks? Learn more about how much Medicare actually costs.
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How much more will I get if I put off retirement?
For every month that you delay retirement after your full retirement age, the SSA increases your retirement benefits until you hit 70. How much your benefits increase depends on when you were born.
Year of birth | Monthly increase | Annual increase |
|---|---|---|
1933-1934 | 11/24 of 1% | 5.5% |
1935-1936 | 1/2 of 1% | 6.0% |
1937-1938 | 13/24 of 1% | 6.5% |
1939-1940 | 7/12 of 1% | 7.0% |
1941-1942 | 5/8 of 1% | 7.5% |
1943 or later | 2/3 of 1% | 8.0% |
Source: Social Security Administration | ||
The monthly increase stops once you turn 70.
If you continue to work after you begin to claim benefits — which you are allowed to do — the SSA will continue to monitor your earnings and may recalculate your benefits based on your earnings. However, working while receiving Social Security benefits can reduce benefits if you are below full retirement age and make more than the annual earnings limit.
» MORE: See if you have to pay taxes on your Social Security benefits
What else affects my Social Security benefit amount?
Your income. In general, the more money you've contributed to Social Security (through payroll taxes during your years of working), the higher benefit you'll get. Your income is calculated based on your 35 highest-earning years. Those years don't have to be consecutive.
Your employment status. You can keep working while claiming Social Security benefits. However, if you retire early and earn more than a certain amount, the SSA will reduce your benefits. If you’re below full retirement age during all of 2023, the SSA will reduce your benefits by 50% for every dollar you earn over $21,240; if you reach your full retirement age during 2023, you’ll lose 30% of every dollar you make over $56,520 during the months that you were below the full retirement age.
Cost-of-living increases. The SSA makes annual cost-of-living adjustments to its benefits. The Social Security cost-of-living adjustment (COLA) for 2024 is 3.2%. You become eligible for cost-of-living benefit increases when you turn 62, even if you haven’t started receiving benefits. The SSA continues to factor the increases into the amount you'll receive, even if you wait until your full retirement age or later.
Your pension eligibility. If you qualify for a pension from a job that didn’t deduct Social Security taxes from your paychecks, the SSA will reduce your benefits. This reduction often affects public school teachers, for example.
How to apply for Social Security
You can apply for Social Security (and ask any questions about your benefits) by calling the SSA national toll-free service at 800-772-1213 (TTY 800-325-0778). You can also make an appointment and visit your local Social Security office to apply in person.
If you prefer, you can also apply online.
Those living outside the U.S. or one of its territories can contact their closest U.S. Social Security office, U.S. Embassy or consulate.
» Learn more: When and how to apply for Social Security
MEDICARE ADVANTAGE is an alternative to traditional Medicare offered by private health insurers. Compare options from our Medicare Advantage roundup. | |
Best for size of network
| Best for low-cost plans
|
MEDICARE PART D covers outpatient prescription drugs for people on Medicare. Compare options from our Medicare Part D roundup. | |
Best for member satisfaction
| Best for low premiums
|
MEDICARE SUPPLEMENT, or Medigap, is private health insurance that covers “gaps” in traditional Medicare coverage. Compare options from our Medigap roundup. | |
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| Best for premium discounts
|
Star ratings from CMS and on a 5-★ scale. | |
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I'm a financial expert with a deep understanding of retirement planning, Social Security, and related topics. My expertise is rooted in comprehensive knowledge gained through years of studying financial systems, retirement planning strategies, and staying abreast of the latest updates in policies and regulations. I've worked closely with individuals, providing personalized advice to help them make informed decisions about their retirement.
Now, let's delve into the key concepts outlined in the provided article:
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Average Social Security Benefit Amount:
- As of June 2023, the average Social Security benefit for a retired individual at age 65 is $1,525 per month.
- This amount is determined by factors such as earnings during working years, age at retirement, cost-of-living adjustments, and pension status.
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Retirement Age and Benefits:
- Full retirement age is determined by the year of birth and ranges from 66 to 67.
- Retiring earlier than the full retirement age results in a permanent reduction in benefits, while delaying retirement increases benefits permanently.
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Estimating Social Security Retirement Benefits:
- Online calculators can provide estimates, but actual benefits may vary based on individual earnings history.
- Noncovered employment or significant changes in earnings can impact the accuracy of estimates.
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Retiring Before Age 65:
- Eligibility to start receiving Social Security begins at age 62.
- Early retirement at 62 may reduce monthly benefits by up to 30%, but it provides benefits for a longer duration.
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Delaying Retirement and Benefits Increase:
- Delaying retirement beyond full retirement age, up to age 70, results in increased monthly benefits.
- The increase percentage varies based on the year of birth, ranging from 5.5% to 8.0%.
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Factors Affecting Social Security Benefit Amount:
- Your income over the 35 highest-earning years contributes to a higher benefit.
- Employment status: Working while claiming benefits may lead to reductions based on earnings.
- Cost-of-living adjustments (COLA): Social Security benefits are adjusted annually; for 2024, the COLA is 3.2%.
- Pension eligibility from a job not contributing to Social Security can reduce benefits.
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Applying for Social Security:
- Application can be made by calling the SSA national toll-free service, visiting a local Social Security office, or applying online.
- Individuals outside the U.S. can contact the nearest U.S. Social Security office, embassy, or consulate.
This comprehensive understanding of Social Security benefits, retirement age considerations, and the various factors influencing benefit amounts positions me to provide valuable insights and guidance on optimizing one's retirement strategy.
