Many older adults rely on Social Security benefits to at least some degree in retirement, so it pays to ensure you’re receiving as much as possible.
Everyone’s benefit amount will be slightly different, as it’s based largely on your work history and income. Knowing how much the average retiree receives, though, can sometimes make it easier to plan for the future.
But how much are you expected to receive from Social Security? And how does that stack up to the average retiree? Here’s how to find out.
How to determine your future benefit amount
Even if you’re years away from retirement, you can still get a close estimate of how much you’re expected to receive in Social Security benefits.
First, you’ll need to create a mySocialSecurity account online. This will give you access to your Social Security statements, which will include an estimate of your benefit amount based on your real earnings throughout your career.
Keep in mind that this benefit amount could change slightly, depending on how many years you continue to work and how much income you earn during that time.
In addition, this estimated benefit amount assumes you’ll be claiming at your full retirement age (FRA). If you file before or after that age, it will affect how much you receive each month.
How does your benefit amount compare to the average?
Again, everyone’s benefit amount will be slightly different. But in 2022, the average retiree will collect around $1,657 per month, according to the Social Security Administration.
If your monthly payments are falling short of the average, there are ways to increase your benefits.
For one, you could consider waiting a few years to claim Social Security. You can begin claiming as early as age 62, but if you wait until your FRA — which is either age 66, 67, or somewhere in between, depending on the year you were born — you’ll earn the full benefit amount you’re entitled to based on your work history. By waiting until after your FRA (up to age 70), you’ll receive a bonus amount on top of your full benefit amount each month.
Working a couple more years could also result in larger payments. The Social Security Administration calculates your benefit amount by taking an average of your wages over the 35 highest-earning years of your career. The longer you work (and the more you’re earning), the higher your benefit amount could be.
Making the most of Social Security
Knowing how your benefit amount compares to the average retiree’s can be helpful when planning for retirement. But even more important is to determine how much you can realistically rely on Social Security benefits.
Social Security benefits are only designed to replace around 40% of your pre-retirement income. When you know approximately how much you’ll receive, it will be easier to determine how much of your income will be replaced by Social Security and how much you’ll need to save on your own.
Social Security is an integral source of income for many retirees, and a little planning can go a long way. By determining how much you can expect to receive in benefits, you can ensure you’re heading into retirement as prepared as possible.
