Here’s the average Social Security benefit at ages 62, 66, and 70

Whether you’re retired or just entering the workforce, there’s a good chance that Social Security income will be needed in some capacity to help cover your expenses in your golden years.

For more than two decades, the Gallup National Poll has surveyed retirees and non-retirees to assess their current or expected reliance on Social Security as a source of income during retirement. Between 80% and 90% of today’s retirees rely to some extent on their monthly paychecks to make ends meet. Meanwhile, between 76 percent and 88 percent of non-retirees think they will need their Social Security payment in some capacity when they hang up their proverbial work coat for good.

In other words, getting the most out of Social Security isn’t just a pipe dream for most Americans — it’s a necessity, given the current and expected reliance on the program’s income.

Image source: Getty Images.

But to get the most out of Social Security, future retirees must first understand the ins and outs of how their benefits are calculated. This includes an idea of ​​how important the age claim may be in determining whether an early (age 62), middle-of-the-road (age 66), or patient (age 70) approach makes the most sense .

These four puzzle pieces are used to calculate your monthly Social Security check

While there are aspects of America’s top retirement program that can be complicated or difficult to understand, the four pieces of the puzzle used by the Social Security Administration (SSA) to calculate your monthly check are simple:

The first of these two variables — your work and earnings history — are intertwined. The SSA will use your 35 highest-earning years, adjusted for inflation, when calculating your monthly payment. In theory, this means you’ll have a chance of receiving a higher monthly benefit in retirement if you earn more, on average, over your lifetime.

But there is a bit of a head in this calculation. For each year they worked less than 35, the SSA will penalize you an average of $0. By working less than 35 years, it is impossible to maximize what you will receive from Social Security.

The third item on the list, full retirement age, is the age at which you become eligible to receive 100% of your retirement benefit. Because full retirement age is determined by year of birth, it’s the one piece of the puzzle over which we have absolutely no control.

Your claim age is the fourth and probably the most important factor in determining how much you will be paid from Social Security each month. While eligible workers can start collecting benefits as early as age 62, the program dangles a monetary carrot to encourage patience. For every year a worker waits to collect their pay, beginning at age 62 and continuing through age 70, their benefit can increase by up to 8 percent. You can see the power of patience in action in the table below.

Data source: Social Security Administration.

What is the average Social Security benefit at ages 62, 66, and 70?

Despite this large variation in payout percentages, each age in the traditional claim range (62 to 70) has its own advantages and disadvantages. But in this range, ages 62, 66, and 70 may be among the most popular for initial collecting purposes going forward.

Let’s take a quick look at what might cause retired workers to claim their payments at these three respective ages, and then dive into the all-important question: What is the average Social Security benefit for ages 62, 66 and 70 years?

Age 62: According to Social Security’s 2023 annual statistical supplement, the earliest possible claim age (62) was the most popular in 2022. The logical reason why 27.3 percent of new claimants chose to start collecting benefits at 62 years is that they did not want to wait get hold of their payment.

In addition, the Social Security Administration’s 2024 Report estimates that the Old Age and Survivors Insurance Trust Fund (OASI), which distributes benefits to retired workers and survivor beneficiaries, will exhaust its asset reserves by 2033. If the asset reserves of OASIs are fully exhausted, drastic benefit cuts of up to 21% may be required to sustain payments through 2098. Collecting benefits as soon as possible can be seen as a way to partially anticipate payment reductions.

Age 66: Social Security’s true middle ground was the second most popular claiming age in 2022 (24.7% of new claimants, excluding disability conversions). By patiently waiting four years after initial eligibility, retired worker beneficiaries can minimize the permanent reduction in their monthly Social Security checks compared to taking the payment at age 62.

It’s also worth noting that 66 was the full retirement age for anyone born from 1943 to 1954. Psychologically, this was an important line in the sand for retired workers.

70 years: The timing of a 70-year claim is that the beneficiaries of retired workers will maximize what they receive monthly. Waiting eight years after initial eligibility can increase a retired worker’s pay 24% to 32% above what they would have received at full retirement age, depending on the year of birth.

But it’s one thing to talk about percentages and a whole new game to discuss what those percentages might mean in terms of dollars.

Earlier this year, the SSA Office of the Actuary released a data set that compiles the average Social Security retiree benefit for each age as of December 2023. Note that, with the exception of age 62, this data is not necessarily indicative of when workers began to collect their payments. Rather, it simply means what the average benefit is for retired workers of a certain age.

In December 2023, about 590,400 62-year-old retirees were taking home $1,298.26. By comparison, about 2.11 million retired workers age 66 received an average check of $1,739.92. Finally, the 3.01 million retired payees who turned 70 in December 2023 received an average check of $2,037.54, which is 57 percent higher than the average retired worker received at age 62.

But does that mean waiting is the best course of action for future Social Security claimants? For this answer, I will draw on a comprehensive study that directly addresses the complicated age claim debate.

Image source: Getty Images.

Statistically speaking, there it is a higher claiming age

Let me preface this discussion by admitting that there is no one-size-fits-all answer as to when Social Security benefits should be claimed. Everyone follows their own path, which means that the variables that matter to them, including financial needs, access to retirement accounts, tax implications, marital status, personal health, and so on, will be unique and will need to be considered from case by case.

Additionally, we are missing a critical piece of information when making the decision on Social Security claims: our “expiration” date. Without knowing when we will “go”, there is never any guarantee in advance that we have made the best possible choice.

With these limitations in mind, using the University of Michigan Health and Retirement Study, researchers at United Income released a report (“The Retirement Solution Hiding in Plain Sight”) five years ago that extrapolated the claims of 20,000 retired workers. Their goal was to determine how many of these retirees made an “optimal” choice—in other words, one that maximized their lifetime income from social security.

Given the long list of unique variables that can make optimizing your Social Security benefits difficult, it’s no surprise that United Income found that only 4 percent of the 20,000 claimants it studied optimized their lifetime payout.

What is much more noteworthy is the inverse relationship between actual and optimal claims. For example, 79 percent of the 20,000 retired workers surveyed began collecting their payments between ages 62 and 64. However, only 8% of all requests were determined to be optimal in those three years. This means that an age 62 requirement may hurt, not help, most retired workers.

At the other end of the spectrum, United Income found that waiting until age 70 to start collecting benefits would have optimized the lifetime payouts of 57 percent of workers studied. In order, the five ages most likely to have optimized lifetime Social Security benefits were 70, 67, 69, 68 and 66.

To be clear, there i am still scenarios where a claim at age 62 or 66 makes perfect sense. For example, if you have one or more chronic diseases that are likely to shorten your life, claiming benefits earlier, even with a permanent reduction in your monthly payment, may make mathematical sense.

But when we step back and examine a wide range of age-supportive Social Security benefits, 70 is statistically speaking superior to all others.