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For most of the last century, 65 has been considered the standard retirement age in the United States, but that doesn’t mean most Americans actually retire at that age. As recently as 1992, the average retirement age in the U.S. was 62 for men and 59 for women, according to a Forbes report that cited data from the Center for Retirement Research at Boston College.
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Since then, the average retirement age has ticked closer to what used to be considered the norm. In 2001, the average retirement age was 63 for men and 60 for women, and nine years later those averages rose to 64 and 62, respectively. In 2021, the average retirement age was 65 for men and 62 for women.
Of course, just because you retire at 65 doesn’t mean you have to start collecting Social Security benefits at that age. You can wait until as late as age 70 — something many Americans do, because the longer you wait, the higher your monthly payment.
For those who are collecting Social Security at age 65, the average payment in 2022 is about $2,484 a month, according to the Social Security Administration. That’s based on the agency’s estimate that the average annual benefit is $29,806 for Social Security recipients who are age 65. The average yearly benefit for 65-year-olds in 2023 is expected to rise to $30,708, or $2,559 a month.
Those numbers are much higher than the average monthly benefit for all Social Security recipients, which was $1,546.59 as of August 2022, according to the SSA. The difference is due to a number of factors — including the fact that recipients younger than 65 typically get lower payments.
Average benefits for 65-year-olds have been on the rise for a couple of decades in terms of current dollars. But when you adjust for inflation, the payments have been moving lower in recent years. According to the SSA, the estimated average yearly benefit for recipients aged 65 in constant 2001 dollars is as follows:
- 2020: $15,313
- 2021: $15,269
- 2022: $15,230
- 2023: $15,189
- 2024: $15,142
Although the SSA implements yearly cost-of-living adjustments to help beneficiaries deal with inflation, those adjustments aren’t always effective in combating the actual inflation rate. Look no further than 2022, when the COLA is 5.9% but the actual inflation rate has been running at above 8% for much of the year.
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If you are approaching age 65 and want to get an estimate of your Social Security benefits, the AARP recommends using its own Social Security Benefits Calculator or checking your online My Social Security account. The latter option bases the estimate on your earnings record on file with the SSA. With the AARP calculator, you’ll need to provide your average annual income.
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Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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Your retirement benefit is based on your lifetime earnings in work in which you paid Social Security taxes. Higher income translates to a bigger benefit (up to a point — more on that below). The amount you are entitled to is modified by other factors, most crucially the age at which you claim benefits.
For reference, the average Social Security retirement benefit
in May 2022 was $1,668 a month. The maximum benefit — the most an individual retiree can get — is $3,345 a month for someone who files for Social Security in 2022 at full retirement age (FRA), the age at which you qualify for 100 percent of
the benefit calculated from your earnings history. FRA is 66 and 4 months for people born in 1956 and is gradually rising to 67 for those born in 1960 or later.
You’ll only know your own amount for sure when you apply, but there are ways to get a sense of it in advance. The quickest and easiest is to use AARP’s Social Security Benefits Calculator or check your
online My Social Security account. The latter draws on your earnings record on file with the Social Security Administration; for the AARP calculator, you’ll need to provide your average annual income.
Both tools project what you could collect each month if you start Social Security at age 62, the earliest you can file for retirement benefits; at full
retirement age; and at age 70. Between 62 and FRA, Social Security reduces your benefit for filing early; between FRA and 70, it increases your payment as a reward for waiting.
For example, the AARP calculator estimates that a person born on Jan. 1, 1960, who has averaged a $50,000 annual income would get a monthly benefit of $1,338 if they file for Social
Security at 62, $1,911 at full retirement age (in this case, 67), or $2,370 at 70. The AARP tool can also give you figures for every age in between, gauge the effect on your benefits of continuing to work and help you budget for your retirement years.
You can also get basic benefit estimates by calling the Social Security Administration at 800-772-1213. But remember, no matter where you get the numbers, they are estimates, not promises. Your actual benefit will vary, perhaps
significantly, based on fluctuations in your earnings, cost-of-living adjustments, whether you continue to work after claiming benefits and
changes in the Social Security law.
Keep in mind
Social Security sets a cap on how much of your income it takes into account in figuring your benefit. In 2022 the cap is $147,000 (it’s adjusted annually to reflect historical wage trends). Any income above that is not counted in your benefit calculation (and is also not subject to Social Security taxes).