Social Security is one of the most important sources of income for retirees in the United States. It helps millions of people stay financially secure and avoid poverty during their retirement years.
Whether it’s your only source of income or just one part of your retirement plan, understanding your Social Security benefits is crucial for making informed financial decisions.
As you approach retirement, or even if you’re many years away, it’s helpful to get an estimate of your future Social Security benefits.
Knowing how much you can expect to receive helps with your retirement planning.
Fortunately, the Social Security Administration (SSA) offers tools to help you get a clear idea of what your benefits might be when you retire.
How Social Security Benefits Are Calculated?
The amount of Social Security benefits you will receive is based on your work history and how much you’ve paid into the system.
The SSA uses your highest-earning years to calculate your benefit amount. If you’ve worked consistently and earned a higher income, your monthly benefits will be higher than someone with a lower lifetime earnings record.
To get a better estimate of your Social Security benefits, you can set up a my Social Security account on the SSA website.
This account gives you access to your earnings record and shows you an estimate of your benefits based on your individual work history.
The Average Social Security Benefit at Age 62
Age 62 is the earliest age at which you can begin to claim Social Security benefits. However, the amount you receive at 62 will be lower than if you wait until your full retirement age (FRA) or beyond.
The reason is that Social Security benefits are reduced if you begin receiving them before your FRA, which is between 66 and 67, depending on the year you were born.
Below is a table showing the average monthly benefits for different ages based on SSA data. These numbers reflect benefits as of the end of the previous year:
| Age | Average Benefit (All) | Average Benefit (Men) | Average Benefit (Women) |
|---|---|---|---|
| 62 | $1,298 | $1,440 | $1,167 |
| 65 | $1,563 | $1,733 | $1,410 |
| 67 | $1,884 | $2,094 | $1,676 |
| 70 | $2,038 | $2,257 | $1,816 |
| 75 | $2,102 | $2,228 | $1,800 |
| 80 | $1,940 | $2,139 | $1,750 |
| 85 | $1,864 | $2,034 | $1,712 |
As of November last year, the average Social Security benefit was about $1,925 per month, which totals to roughly $23,000 per year.
It’s important to note that this amount can vary greatly depending on your earnings during your working years. If you earn more than the average, you’ll likely receive higher benefits.
What Happens If You Start Social Security Early?
The age of 62 is the earliest you can start receiving Social Security benefits, but it’s important to understand the impact of this decision.
Starting early means your benefits will be reduced compared to if you wait until your full retirement age or beyond.
For example, if your full retirement age is 66, but you begin receiving benefits at 62, you could face a reduction of about 25-30% in your monthly payment.
While it might be tempting to start early, especially if you need the money sooner due to personal reasons like poor health or job loss, waiting could provide more financial security in the long run.
Each year you wait to claim benefits after age 62 (up until age 70), your monthly benefit will increase.
This is because Social Security offers delayed retirement credits, which raise your benefits if you wait to claim.
Social Security Benefit Increases Over Time
One important thing to note is that your Social Security benefits are adjusted each year for inflation through a process called Cost of Living Adjustments (COLA).
This means your monthly benefit could increase slightly each year to keep up with the rising cost of living. While the increases may not always be large, they can help protect your benefits from losing value over time.
Should You Claim Social Security at Age 62?
For many people, the best strategy is to wait until age 70 to start claiming Social Security. The longer you wait, the higher your monthly benefit will be.
However, not everyone can afford to wait that long, and some may need to claim earlier due to health issues, unemployment, or other personal circumstances.
If you can afford to wait and have other sources of income in the meantime, delaying your Social Security claim could result in a significantly higher benefit for your retirement.
Conclusion
Social Security is an important part of your retirement planning, and understanding how much you can expect to receive is essential for making informed decisions about your future.
For people at age 62, the average Social Security benefit is about $1,298 per month. While starting benefits at 62 is an option, waiting until a later age can increase your monthly benefit significantly.
Before making a decision about when to claim your benefits, consider your financial situation, health, and long-term retirement goals. It’s always a good idea to plan ahead and use tools like my Social Security account to get an accurate estimate of your benefits.
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Archer Bannister is a journalist with 4 years of experience covering hard-hitting stories. Currently working with Mikeandjonpodcast, Archer specializes in delivering timely and in-depth updates on a variety of topics, including crime news, politics, and national issues affecting the USA. His expertise and dedication to delivering accurate, impactful news make him a trusted voice for audiences seeking to stay informed on critical topics.
