Average Social Security Benefit Is $2,086 a Month. Here’s How to End Up With a Bigger Check.
Social Security was never designed to be a retiree’s only paycheck. For the typical worker, it replaces about 40% of pre-retirement earnings, and many retirees need considerably more income than that to live comfortably. The gap between what people expect Social Security to provide and what it actually delivers can have real financial consequences, especially when health care costs, housing, and other everyday expenses are factored in.
Right now, the average retired worker collects roughly $2,086 a month from Social Security, or just over $25,000 a year. That number is useful as a benchmark, but it only tells part of the story. Social Security also pays disability and survivor benefits, so the average monthly check can vary depending on who is being counted.
If you want a benefit that clears $2,086 a month, it helps to understand how the calculation works. Social Security looks at your 35 highest-earning years, adjusted for wage inflation, to establish your primary insurance amount. That’s the baseline for what you’ll receive at full retirement age. A year with no earnings or unusually low earnings can pull that average down, while a high-earning year can push it up.
When you claim also matters just as much as how much you earn. If you were born in 1960 or later, full retirement age is 67. You can start collecting at 62, but your monthly benefit will be permanently reduced. Wait until after 67, and you’ll receive an 8% raise for each year you delay, up to age 70. That increase is locked in for life, and every future cost-of-living adjustment is applied to that higher amount.
Not everyone has the luxury of waiting. If you need the income, filing early can make sense despite the reduction. But retirees with other assets or the ability to keep working often find that delaying even a year or two produces a noticeably larger check for life. Over a 20- or 30-year retirement, the difference can add up to tens of thousands of dollars.
Another strategy is to earn more during your career. Building in-demand skills, reaching for promotions, and taking on side work can all improve your earnings history. Side income counts toward Social Security as long as it’s reported and taxed, so the effort you put in now can pay off in monthly checks later.
If you reach full retirement age and decide to keep working, you may be able to do both: continue earning a paycheck and delay filing to earn delayed retirement credits. Your new wages can also replace lower-earning years in the 35-year calculation. For those who don’t want to work until 70, savings and investments can help bridge the gap until then.
Before making any claiming decision, check your official earnings record. You can create an account on the Social Security Administration’s website and view your latest statement, which includes estimates at different claiming ages. It’s also a good way to catch errors that could otherwise reduce your benefit.
One more thing to keep in mind: If you continue working after starting benefits and reach full retirement age, Social Security may recalculate your benefit when your current wages replace one of your 35 lower-earning years. The program’s annual cost-of-living adjustment also raises checks over time, though those increases are usually modest and tied to inflation.
If you have more than $1,000,000 saved, the challenge often shifts from building a nest egg to making it last. The last thing anyone wants in retirement is to run out of money. Fisher Investments has published The Definitive Guide to Retirement Income, which walks through strategies wealthy retirees use to generate lasting income. The guide is available for free download today. (sponsor)
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