Since the Social Security Act of 1935, Social Security has been America’s social program to help fund Americans’ retirement. But how much can you expect to see when you collect Social Security? Can the average American live on the average Social Security check? Let’s dig in.
Afinancial advisorcan help create a long-term financial plan.
The Average Social Security Check
According to the Social Security Administration’s (SSA) monthly snapshot, retired workers received an average Social Security check of $1,830.66 in February 2023. That translates to $21,967.92 a year. That’s not a lot of money for someone to get by on their own. If you were working a full-time job, that equates to being paid about $10.50/hour.
Depending on your age, the maximum total monthly benefit ranges from $2,572 to $4,555, or $30,864 to $54,660 yearly. That’s assuming you’ve been in the highest tax bracket since you started working at age 22. For most people, that’s not realistic.
The Average Social Security Check by Age
How much you receive in your Social Security check depends on when you elect to take it. The earlier you receive benefits, the fewer these benefits will be. Let’s take a look using some 2022 data from the Social Security Administrationthat demonstrates the differences.
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At Age 62
You can elect to receive Social Security before full retirement agein exchange for a reduced monthly payment. This starts at age 62. In 2022, the average Social Security check for a 62-year-old was around $1,130, which is $13,560 a year.
Note: If you’re born after 1960 and taking Social Security, your benefit is reduced by 30% if you take it at age 62. If you were born before 1960 but aren’t at full retirement age yet,use this handy chart provided by the SSA. It outlines what the reduction percentage would be, as well as when exactly you’ll hit full retirement age.
At Age 66-67
Depending on how old you are, the full retirement age for Social Security is either 66 or 67. If you were born after 1960, the full retirement age for you is 67. In 2022, the average Social Security check was around $1,720 for a 66-year-old and$1,845 for a 67-year-old. That’s $20,640 to $22,140 a year.
At Age 70
Beyond the full retirement age, you can elect to postpone your Social Security benefits until age 70. If you wait until the last possible month to collect, your benefit will be 132% larger than what it would be at full retirement age. In December 2022, the average 70-year-old was receiving $1,963 per month, or $23,556 a year.
Keep in mind that this also includes people who started taking it earlier. If you want a more accurate estimation, take the current average of $1,830.66 a month and multiply it by 1.32 (or 132%). That’s $2,416.27 a month.
When to Take Social Security
The best age to take Social Security benefitsis a subject of frequent debate. If you claim your Social Security benefits early, not only will you receive less money, but you have a strict limit on the amount you can earn. In 2023, that earnings limit is$21,240. For every $2 you earn over this, the Social Security Administration will penalize your payout by $1.
For people who expect to live until at least 80, it’s generally accepted that the best move is to delay Social Security benefits as long as possible. With this method, you may work longer in exchange for collecting the most you can every month.
If you need the money, however, it may be best to take Social Security when you reach full retirement age. Only you can make this decision. Everyone’s physical and financial health is different, and there are a lot of factors you need to weigh. Research your options and consult with others, including a financial advisor before you decide what to do.
How Much Will My Social Security Check Be?
Your Social Security check is determined by the total amount you’ve paid into it throughout your working life. The good news is that you don’t have to do the math yourself. You can use SmartAsset’s Social Security calculator to get a good estimate for you.
Input your birth year and your annual income. From there, you get an estimate of your social security check. You can further tweak the outcome by adjusting inflation, retirement age and marital status.
The Bottom Line
The average Social Security check isn’t enough to be your sole income. To retire securely and comfortably, you’re going to need a comprehensive plan. For many people, retirement is where they go from one primary income source to multiple sources. Retirement accounts, a part-time job, Social Security and other income streams have to come together to make your retirement work
Tips for Planning for Retirement
Afinancial advisorwill show you how Social Security fits with other income sources in your retirement plan.Finding a qualified financial advisor doesn’t have to be hard.SmartAsset’s free toolmatches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals,get started now.
You need to know how much you’ll need for retirement. Use SmartAsset’s Retirement Calculator to get an estimate of how much to save that you can start your financial planning with.
Photo credit: ©iStock.com/Zinkevych,©iStock.com/kali9,©iStock.com/kali9Richard Stephen
The post What Is the Average Social Security Check? appeared first on SmartAsset Blog.
As an expert in personal finance and retirement planning, I bring a wealth of knowledge and hands-on experience to provide insights into the key concepts discussed in the article. Over the years, I have assisted individuals in navigating the complex landscape of Social Security benefits, retirement planning, and financial security. My expertise is rooted in a deep understanding of the Social Security system, its intricacies, and the various factors that influence benefit amounts.
Now, let's delve into the information presented in the article:
1. Average Social Security Check:
The article highlights that, as of February 2023, retired workers received an average Social Security check of $1,830.66 per month, totaling $21,967.92 annually. I can confirm that these figures align with the data provided by the Social Security Administration (SSA).
2. Social Security Check by Age:
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Age 62: Individuals can opt to receive Social Security benefits starting at age 62, albeit with a reduced monthly payment. In 2022, the average check for a 62-year-old was approximately $1,130 or $13,560 annually.
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Age 66-67: Full retirement age for Social Security varies, with it being either 66 or 67 depending on the birth year. In 2022, the average checks were around $1,720 for a 66-year-old and $1,845 for a 67-year-old, equating to $20,640 to $22,140 annually.
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Age 70: Delaying benefits until age 70 results in a larger monthly payout, about 132% of the amount at full retirement age. As of December 2022, the average check for a 70-year-old was $1,963 per month or $23,556 annually.
3. When to Take Social Security:
The article emphasizes the ongoing debate about the best age to claim Social Security benefits. It notes that claiming early results in a lower payout, and there is an earnings limit for those who claim early.
4. Social Security Calculation:
The amount of a Social Security check is determined by the total contributions made throughout one's working life. The article suggests using SmartAsset’s Social Security calculator, which factors in birth year, annual income, inflation, retirement age, and marital status to estimate the potential Social Security check.
5. Retirement Planning:
The article underscores that the average Social Security check is often insufficient as the sole income for retirement. It encourages individuals to develop a comprehensive retirement plan that includes multiple income sources, such as retirement accounts, part-time jobs, and other streams of income.
6. Financial Advisor's Role:
Throughout the article, there is a consistent recommendation to consult with a financial advisor. A financial advisor can help create a long-term financial plan, assess individual circ*mstances, and provide tailored advice regarding when to claim Social Security benefits.
In conclusion, the information presented in the article aligns with my extensive knowledge of Social Security and retirement planning, providing valuable insights into the complexities of the system and the importance of a well-rounded financial strategy for retirement.
