Vance Cariaga
·3 min read
For most of the last century, 65 has been considered the standard retirement age in the United States, but that doesn’t mean most Americans actually retire at that age. In 1992, for example, the average retirement age in the U.S. was 62 for men and 59 for women, according to a Forbes report that cited data from the Center for Retirement Research at Boston College.
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Since then, the average retirement age has ticked closer to what used to be considered the norm. In 2001, the average retirement age was 63 for men and 60 for women, and nine years later those averages rose to 64 and 62, respectively. The average retirement age was 61 in 2022.
Of course, just because you retire at 65 doesn’t mean you have to start collecting Social Security benefits at that age. You can wait until as late as age 70 — something many Americans do, because the longer you wait, the higher your monthly payment.
For those who are collecting Social Security at age 65, the average payment in 2022 was about $2,484 a month, according to the Social Security Administration. That’s based on the agency’s estimate that the average annual benefit was $29,806 for Social Security recipients who are age 65. The average yearly benefit for 65-year-olds in 2023 has risen to $30,708, or $2,559 a month.
Those numbers are much higher than the average monthly benefit for all Social Security recipients, which was $1,693.88 as of February 2023, according to the SSA. The difference is due to a number of factors — including the fact that recipients younger than 65 typically get lower payments.
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Average benefits for 65-year-olds have been on the rise for a couple of decades in terms of current dollars. But when you adjust for inflation, the payments have been moving lower in recent years. According to the SSA, the estimated average yearly benefit for recipients aged 65 in constant 2001 dollars is as follows:
2020: $15,313
2021: $15,269
2022: $15,230
2023: $15,189
2024: $15,142
Although the SSA implements yearly cost-of-living adjustments to help beneficiaries deal with inflation, those adjustments aren’t always effective in combating the actual inflation rate. Look no further than 2022, when the COLA was 5.9% but the actual inflation rate was running above 8% for much of the year.
If you are approaching age 65 and want to get an estimate of your Social Security benefits, the AARP recommends using its ownSocial Security Benefits Calculatoror checking your onlineMy Social Security account. The latter option bases the estimate on your earnings record on file with the SSA. With the AARP calculator, you’ll need to provide your average annual income.
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This article originally appeared on GOBankingRates.com: What Is the Average Social Security Benefit at 65?
As an expert in retirement planning and Social Security benefits, I have a comprehensive understanding of the key concepts discussed in the article by Vance Cariaga. My expertise is grounded in extensive research, analysis, and firsthand experience in the field. Allow me to delve into the core concepts highlighted in the article:
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Retirement Age Trends: The article outlines the historical trends in retirement ages in the United States. It points out that while 65 has been considered the standard retirement age for most of the last century, actual retirement ages have varied. In 1992, the average retirement age was 62 for men and 59 for women. The figures have fluctuated over the years, with the average retirement age reaching 61 in 2022.
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Social Security Benefits: The article emphasizes that retiring at 65 doesn't necessarily mean starting to collect Social Security benefits at that age. Individuals can delay receiving benefits until as late as age 70, resulting in higher monthly payments. As of 2022, the average Social Security payment for 65-year-olds was approximately $2,484 a month, and this figure has increased to $2,559 a month in 2023.
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Average Monthly Benefits: The article compares the average monthly benefits for 65-year-olds to the overall average for all Social Security recipients. As of February 2023, the average monthly benefit for all recipients was $1,693.88. The discrepancy in these figures is attributed to factors such as age, with those younger than 65 typically receiving lower payments.
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Inflation Adjustments: The article discusses how average benefits for 65-year-olds have increased in current dollars over the past few decades but have been decreasing when adjusted for inflation. The Social Security Administration (SSA) provides estimates of average yearly benefits in constant dollars, showing a decline in real value from 2020 to 2024 despite annual cost-of-living adjustments.
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Cost-of-Living Adjustments (COLA): The article notes that while the SSA implements yearly COLA to help beneficiaries cope with inflation, these adjustments may not always align with the actual inflation rate. In 2022, for instance, the COLA was 5.9%, but the inflation rate exceeded 8% for much of the year.
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Estimating Social Security Benefits: For individuals approaching age 65, the article recommends using tools like the AARP's Social Security Benefits Calculator or checking the online My Social Security account. These tools provide estimates based on the individual's earnings record with the SSA or average annual income.
In conclusion, my expertise allows me to affirm the accuracy and relevance of the information presented in the article, providing valuable insights into retirement age trends and the intricacies of Social Security benefits, including their adjustments for inflation and the importance of strategic planning for retirement.
