There’s a reason it’s more than the program’s overall average.
How much Social Security is being collected by retirees these days? The program’s administrators say this year’s average monthly payment for retired workers stands at $1,976.
Over a full year, that average adds up to $23,712. While substantial, it’s far from being enough for most retirees to live on exclusively. The U.S. Census Bureau reports the average retiree’s household currently spends about $65,000 per year on ordinary living expenses like food, clothing, and shelter, or roughly $5,400 per month. While most of these households include more than one adult collecting some form of income, clearly Social Security isn’t covering everything.
The overall average figure, however, is also a bit misleading. Most older retirees (70+) are enjoying measurably bigger benefit payments. The typical 72-year-old is cashing monthly checks of $2,786, for instance.
Why the big difference? A couple of things are at play.
First and foremost, the overall average of $1,976 is being skewed significantly lower by people who opted to begin collecting Social Security benefits before their full retirement age (or FRA). You can claim as early as 62, but doing so will reduce your payment by as much as 30% of what you might have collected by waiting until FRA. For perspective, as of last year, at least 4 million of the nearly 52 million people collecting Social Security retirement benefits initiated their benefits before FRA.
The other factor at work here is the likelihood that some of these 72-year-olds waited to claim their benefits well after reaching FRA. Doing so increased the size of their monthly check beyond what they were entitled to receive at FRA thanks to delayed retirement credits.
Just bear in mind that Social Security was never meant to make up the entirety of anyone’s retirement income. It’s essential that you save and invest on your own — and start doing so as early as possible — so you won’t need to rely solely on the program’s increasingly uncertain benefits.