What Is the Average Social Security Benefit?

The average Social Security benefit is $1,920 per month according to the Social Security Administration in August 2024. However, benefit payment amounts can vary widely depending on how many years you’ve worked and when you start taking them. In this article, we’ll cover what the average Social Security benefit is, how benefits are determined, and what factors influence your benefits.

How Your Social Security Payments Are Determined

Social Security benefits are based on how long you’ve worked and how much you’ve earned. The Social Security Administration calculates a primary insurance amount based on your average indexed monthly earnings over a maximum of 35 years. 

The primary insurance amount is your benefit at full retirement age (67 if you were born in 1960 or later), and it increases or decreases depending on when you start taking benefits. You can begin taking reduced benefits at age 62, or wait to access full benefits at 67. If you wait until age 70, you’ll receive even higher benefits.

What Is Full Retirement Age?

What you get for Social Security depends on your full retirement age. If you were born in 1960 or later, that age is 67. But if you were born any earlier, your full retirement age is slightly different. This is because the retirement age gradually increased from 65 to 67 for people born in 1937 through 1960:

So, if you were born in 1959, your full retirement age is two months before your 67th birthday.

How Do You Qualify for Social Security?

Social Security eligibility is based on “credits,” which you earn by paying your Social Security taxes. For example, you get one credit for earning and paying Social Security tax on an income of $1,730 in 2024.

You must earn at least 40 credits over your career to qualify for Social Security based on your income. You can earn up to four credits per year, so in most cases, working for 10 years qualifies you for Social Security. 

The SSA considers your highest 35 years of earnings in its benefits calculation. If you don’t have 35 working years, your benefits will be lower since years without work count as zeroes in the calculation.

How Social Security Payments Have Changed

Social Security has evolved over the years from a simple retirement program to one that also covers spouses, dependents, and disabled people. The way benefits are paid has also changed. 

Since 1975, the SSA has issued cost of living adjustments (COLA) each year that modify benefits to account for inflation. Social Security benefits increased by 8.7% in 2022, 3.2% in 2023, and 2.5% in 2024. The average increase for the past 30 years is 2.5%. While it’s nice to get an increase, inflation can hit retirees hard especially since you’re likely to spend more on housing and medical care. 

Other Social Security amendments in 1977 and 1983 also changed how benefits are calculated. The 1977 amendment raised the payroll tax and slightly reduced benefits for better long-term stability. Multiple 1983 amendments increased benefits for disabled widows and widowers, scheduled an increase in the retirement age, and more.

Note that we’re talking about Social Security specifically, not Supplemental Security Income (SSI). SSI is a benefit program for people with limited income and eligibility for SSI isn’t based on prior work or age.

Factors That Impact Social Security Benefits

Your Social Security benefit payments depend on a variety of factors:

• Average earnings: Higher earnings during working years increase your benefits up to a point. For example, the maximum you can receive if you earn more than $168,600 annually and wait until age 70 to claim it is $4,873 per month.
• Number of working years: If you worked less than 35 years, your benefits may be lower. If you worked more than 35 years, the SSA will only “count” your highest-earning 35 years in its calculation.
• Age you start taking payments: Benefits can be reduced by as much as 30% if you take Social Security “early,” i.e. from age 62 to 66 (if your retirement age is 67). While full retirement benefits are available at 67, waiting until age 70 can increase them by as much as 30% and help maximize your Social Security benefits.
• Work during retirement: You can still work while claiming Social Security benefits. If you earn more than a certain amount per year, benefits are reduced between age 62 and your full retirement age. You get your full benefit at your retirement age and can continue earning after that without a penalty. 
• Type of benefit you qualify for: Social Security pays retirement benefits to retired workers, spouses of retired workers, and children of retired workers (i.e. minor children under age 18, adults disabled before the age of 22, or high school students under age 19). It pays survivor benefits to children of deceased workers, widows and widowers, and parents of deceased workers. It pays disability benefits to disabled workers and their spouses and children.

Average Social Security Benefit by Age Claimed

So how much is the average Social Security benefit? In 2024, the average monthly benefit is about $1,940 for retired workers according to the SSA. Below, you can see how the age at which you claim benefits changes the amount. This is based on a worker born in 1960 or after with a retirement age of 67.

Claiming Social Security early affects your benefit for the rest of your life, as does taking it late. Once you start taking benefits, it only increases with the cost of living adjustment.

You can use the Social Security Administration’s early and late retirement calculator to see what would happen in your particular situation.

Average By Social Security Benefit Type

Retired workers take home the largest Social Security benefits on average. Let’s see how average payments vary depending on the type of benefit you qualify for.

What’s the Maximum Social Security Benefit?

Many retired workers receive higher than average benefits because the average includes people who worked less than 35 years or took benefits early. 

But what’s the maximum benefit you can receive? The upper limit is based on maximum taxable earnings, set at $168,600 in 2024. Earning more than this amount per year won’t increase your benefits. Here are the maximum monthly benefits claimed by age in 2024.

Even if you wait to receive the maximum benefit of $4,873 per month ($58,476 per year), you might need more income to cover your expenses in retirement. This is why it’s important to consider other ways to supplement your income.

How To Maximize Your Retirement Income With Annuities

Buying an annuity is one strategy to turn savings into income during retirement. Deferred annuities grow interest in a tax-deferred account for a period and are distributed as income later on. Immediate annuities turn a lump sum premium into guaranteed payments within a year and can help you shelter a portion of your savings from market fluctuations. Contract options like riders can also let you leave value to beneficiaries or plan for long-term care needs. 

Also, income from annuities doesn’t decrease Social Security payments taken before full retirement age, unlike wages or self-employment profit. This means you can take Social Security benefits early and receive annuity income without an additional reduction in benefits.

Find Out If an Annuity Is Right for You

While Social Security plays an important role in providing security in retirement, factors like your age, income, and benefit caps could still leave a financial gap. To make sure you can enjoy your retirement to the fullest, you may want to consider annuities as another option for income. Annuities offer you the flexibility to choose how interest is accrued, when to annuitize, and how long payments last. Reach out to an annuity agent to see how different types of annuities can provide security in your retirement.