Here's The Average Social Security Benefit For A Retired Worker By Age

Between the constant fear of Social Security benefits running out (we have a clearer picture of its future now) and concerns over just how much you need to comfortably retire, the process of saving for retirement can be a stressful one. It can also require you to research, manage, and keep multiple different kinds of retirement accounts as well as pay for a financial adviser to help make sense of it all. A significant factor in most Americans' retirement planning comes down to Social Security benefits. Or, more specifically, what monthly benefits amount you can hope to receive once you retire. Unfortunately, finding a clear answer for this amount can be complicated.

Anyone can technically start receiving their Social Security retirement benefits as early as age 62; however, there can be significant benefit reductions for choosing to do so. For example, according to the Social Security Administration's benefit-reduction table, anyone turning 62 in 2024 would face a 30% cut in their benefits amount compared to what their full-retirement amount would be at 67.

It's also important to realize that the age of full retirement depends on the year you were born. For those born between 1943 and 1954, the full retirement age is 66 while those born between 1955 and 1959 have a gradual increase. The full retirement age is 67 for those born in 1960 and after. This is important because it can have a significant impact on the average Social Security benefit amount people receive depending on their age. Let's dive into the financial possibilities.

For starters, the average Social Security benefit amount in January 2024 was $1,907 per month, according to the SSA, with a maximum benefit (for those who retire at full retirement age) of $3,822. Those choosing to retire early (i.e., before turning 66 or 67) face reduced benefits amounts. When looking at the maximum benefit that a retired worker could receive, those who retire early can expect over $2,000 less per month than someone who delays retirement until they're 70.

While retiring early can offer more freedom for personal projects, it isn't necessarily a good idea. What's more, a growing number of retirees are actually returning to the workforce. According to LinkedIn data, the share of baby boomers that exited retirement in 2023 was at a five-year high (at 13.2%). While motivations to return to work can vary, from needing additional income to boredom and loneliness, it's worth noting that workers over age 75 are the fastest-growing age group in the U.S. workforce. In fact, according to the Pew Research Center, workers over 75 have more than quadrupled in size since 1964.

For those who wait until their full retirement age (66 or 67), they can expect varying amounts of Social Security payments, depending on their lifetime incomes and years in the workforce. Looking at the SSA's Annual Statistical Supplement (2024), for December 2023, the average monthly benefits amount for a 67 year old who retired at full retirement age was $2,101.74, with slight differences at 70 and 75 and an average of $2,201.97 at age 80. (Note that the annual COLA increase for Social Security is another factor.)

According to the Social Security Administration, for every year (up to age 70) that an individual chooses to delay collecting their retirement benefits — after reaching full retirement age — they can receive an 8% bonus. To put that into perspective, the average monthly benefit payment for a 67-year-old retiree with the delayed retirement benefits is $2,426.67 (that's little over $86 more per month than a 67 year old without the delayed retirement credit applied).

However, if they continue to delay, the average monthly benefit amount for a 70 year old with the delayed retirement benefit is $2,924.27, which is about $538 more per month than a 70 year old retiree without the delayed retirement credit. This delayed retirement credit accumulates monthly, meaning if you can't wait until age 70 (when the credit maxes out), you can still accrue some of the benefit. However, even though the SSA incentivizes delaying retirement, it might not be the best choice for everyone.

Delaying retirement can actually lead to unintended consequences for workers down the pipeline. According to a working paper from the National Bureau of Economic Research, every one year delay in the average retirement (of workers close to retirement) results in a 2.5% reduction in the wage growth of younger coworkers. It's also worth noting that, thanks to the persistent racial wealth gap in America, people of color might not feel they financially have the choice to retire earlier. Another working paper from NBER found that the average retirement wealth for Black and Hispanic households was substantially lower than it was for white households.