For more than 80 years, Social Security has provided retired workers with a monthly benefit. While it won’t make anyone rich, it has become an essential source of income for many retirees.
For the past 23 years, Gallup has asked retirees how much they depend on Social Security. Their surveys show that 80% to 90% of retirees rely on these monthly payments to cover expenses.
A separate study by the Center on Budget and Policy Priorities found that without Social Security, the poverty rate for adults 65 and older would be nearly four times higher—10.2% with Social Security versus an estimated 38.7% without it.
That’s why understanding how to get the most out of Social Security is crucial for most future retirees.
To maximize your benefits, you first need to know how they are calculated. Your benefit depends on your work history, earnings history, full retirement age, and the age you start claiming benefits.
How Social Security benefits are calculated
- Work and earnings history
The Social Security Administration (SSA) looks at your 35 highest-earning, inflation-adjusted years. If you earn more over your career, your benefit will likely be higher. If you don’t have at least 35 years of work, the SSA averages in $0 for each missing year, which lowers your benefit. - Full retirement age
This depends on the year you were born. It’s the age when you can receive 100% of your retired-worker benefit. This is something you cannot control. - Claiming age
You can start receiving benefits as early as 62, but waiting longer increases your monthly payout. For each year you delay claiming from 62 to 70, your benefit can grow up to 8%.
Here’s how monthly benefits increase depending on your birth year and claiming age:
| Birth Year | Age 62 | Age 63 | Age 64 | Age 65 | Age 66 | Age 67 | Age 68 | Age 69 | Age 70 |
|---|---|---|---|---|---|---|---|---|---|
| 1943-1954 | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% | 132% |
| 1955 | 74.2% | 79.2% | 85.6% | 92.2% | 98.9% | 106.7% | 114.7% | 122.7% | 130.7% |
| 1956 | 73.3% | 78.3% | 84.4% | 91.1% | 97.8% | 105.3% | 113.3% | 121.3% | 129.3% |
| 1957 | 72.5% | 77.5% | 83.3% | 90% | 96.7% | 104% | 112% | 120% | 128% |
| 1958 | 71.7% | 76.7% | 82.2% | 88.9% | 95.6% | 102.7% | 110.7% | 118.7% | 126.7% |
| 1959 | 70.8% | 75.8% | 81.1% | 87.8% | 94.4% | 101.3% | 109.3% | 117.3% | 125.3% |
| 1960+ | 70% | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% |
Data source: Social Security Administration
Average benefits at ages 62, 67, and 70
Most retirees tend to claim at three ages: 62, 67, or 70. Each has pros and cons:
- Age 62: You get benefits sooner and avoid potential future cuts, but your monthly payout is reduced by 25%–30%. You may also face penalties if you continue to earn money while claiming.
- Age 67: This is the full retirement age for people born in 1960 or later. You get 100% of your benefit, but if you live a long life, you might miss out on additional income by not waiting.
- Age 70: This guarantees the highest monthly payout, 24%–32% more than your full retirement age. The downside is there’s no guarantee you’ll live long enough to fully benefit.
In December 2023, average monthly benefits were:
- Age 62: $1,298.26
- Age 67: $1,883.50
- Age 70: $2,037.54
Waiting until age 70 can increase your monthly benefit by about 57% compared to claiming at 62.
Is there a “best” claiming age?
A study by United Income looked at 20,000 retired workers to find which claiming ages maximize lifetime income. Only 4% of retirees had claimed optimally. Most people (79%) claimed between ages 62 and 64, but only 8% of those claims were actually optimal.
Meanwhile, waiting until 70 would have been the best choice for 57% of retirees in the study.
Of course, health conditions and personal circumstances can change the best age for claiming. But for most future retirees, patience can pay off, especially if you rely on Social Security for your retirement.
How to get a Social Security boost
Many Americans are behind on retirement savings, but there are little-known strategies to increase your benefits. For example, one simple approach could add as much as $22,924 each year. Learning how to maximize your Social Security benefits can help you retire with confidence.
