For an overwhelming majority of retirees, Social Security provides more than just a check. America’s top retirement program represents the financial foundation that helps those who can no longer provide for themselves to make ends meet.

Over the last 23 years, Gallup has conducted annual surveys to gauge the reliance of retirees on the Social Security income they receive. Between 80% and 90% of respondents (including 88% in April 2024) have noted their Social Security check accounts for a “major” or “minor” source of income. In other words, it’s essential income that most retirees would struggle to live without.

This means getting as much as possible out of Social Security during retirement isn’t a luxury, so much as a necessity, for future generations of workers. But in order to do so, you’ll need to understand the inner workings of how your benefit is calculated, as well as what you can expect to receive each month based on your all-important claiming age. There are some pretty noticeable payout differences when collecting as early as possible (age 62), via a middle-ground approach (age 65), or if you choose to wait (age 70).

Image source: Getty Images.

These four factors are used to calculate your monthly Social Security benefit

Although Social Security has a couple of quirks and potential surprises for future retirees — e.g., your benefits can be taxed at the federal level, as well as in nine states — the four factors that allow the Social Security Administration (SSA) to calculate your monthly check are very easy to understand:

1. Earnings history
2. Work history
3. Full retirement age
4. Claiming age

When calculating how much you’ll receive each month from Social Security, the SSA takes your 35 highest-earning, inflation-adjusted years into account. This means if you’ve earned more in wages and salary (investment income isn’t included) throughout your lifetime, there’s a good chance you’ll receive a larger Social Security check during retirement.

Conversely, if you fail to work 35 years, the SSA will penalize you. For every year less of 35 worked, a $0 is averaged into your calculation, which adversely impacts your eventual monthly payout.

The third variable, full retirement age, represents the age you’re eligible to receive 100% of your retired-worker benefit. Since it’s entirely determined by the year you’re born, it’s the only variable you have no control over.

The fourth factor, and the one that arguably shifts the payout pendulum more than any other, is your claiming age. While retired-worker benefits can be collected as early as age 62, the SSA dangles a monetary incentive to encourage patience. For every year a worker waits to collect their payout, beginning at age 62 and continuing until age 70, their benefit can grow by up to 8%.

You can see how this benefit collection trade-off plays out in the table.

Data source: Social Security Administration. Table by author.

What’s the average Social Security benefit at ages 62, 65, and 70?

Though every age within the traditional claiming-age range (62 through 70) has its own unique pros and cons, collecting benefits at 62, 65, and 70 should prove popular in the years to come. Let’s briefly dive into the advantages and drawbacks associated with claiming benefits at each of these respective ages, as well as examine their average payouts.

• Age 62: The temptation of collecting benefits at age 62 is not having to wait to get your hands on your payout. Additionally, with the 2024 Social Security Board of Trustees Report forecasting sweeping benefit cuts of as much as 21% for retired workers by 2033, an early claim can be viewed as a way of front-running a possible payout cut. Conversely, collecting at age 62 means accepting a permanent 25% to 30% reduction to your monthly check, and it may expose you to early filer penalties.
• Age 65: The lure of the middle-ground approach is that you’ll minimize the permanent monthly payout reduction associated with taking benefits prior to reaching full retirement age, yet you’ll still be young enough to enjoy this extra income. On the other hand, if you live well into your 80s and chose to take your payout at age 65, there’s a good likelihood you’ll have missed out on a lot of lifetime income from America’s top retirement program.
• Age 70: The undeniable advantage of an age 70 claim is that you’ll maximize your monthly benefit. Depending on your birth year, collecting at age 70 will increase your payout by 24% to 32% above what you’d have received at full retirement age. The potential downside of waiting until age 70 to receive your payout is there are no assurances you’ll live long enough to maximize the lifetime benefit you’ll receive.

With a better understanding of the pros and cons associated with these claiming ages, let’s dive into the all-important question: What’s the average Social Security benefit at ages 62, 65, and 70?

Every year, the SSA’s Office of the Actuary releases a data set detailing the average benefit paid to retired workers between ages 62 and 99-plus. Keep in mind that this data is based on the age of retired workers and doesn’t necessarily represent their claiming age (except for age 62). For example, an age 70 beneficiary may have begun collecting their payout anywhere from age 62 through 70.

Based on this data set from December 2023, the more than 590,000 age 62 retired-worker beneficiaries brought home an average of $1,298.26. By comparison, the nearly 1.39 million age 65 retired workers received an average of $1,563.06 in December 2023. Finally, roughly 3.01 million age 70 retired workers collected an average of $2,037.54. In other words, the average age 70 retired-worker beneficiary brought home 57% more in December 2023 than the earliest filers.

Image source: Getty Images.

One claiming age is, statistically, head and shoulders above the rest

Given this wide variance in monthly Social Security checks, you might be wondering if waiting to take your payout is the smartest move.

The honest answer is that we simply don’t know with 100% certainty. Since none of us knows the date of our “departure” ahead of time, there’s always going to some degree of guesswork involved when claiming Social Security benefits.

Additionally, we all have unique variables that weigh on our Social Security claiming decision. This is to say your financial needs, the tax implications you’ll face in retirement, your marital status, and your personal health, among other factors, are unique to you. There simply isn’t a one-size-fits-all strategy.

Nevertheless, an exhaustive study released five years ago by researchers at online financial planning company United Income extrapolated the claiming decisions of 20,000 retired workers to determine which ages, if any, were likeliest to optimize benefits. By “optimize,” United Income is referring to the age likeliest to maximize lifetime (note the italics) benefit collection.

Considering the many aforementioned unknowns, United Income found that just 4% of the claimants analyzed had optimized their payout.

However, the bigger takeaway was the almost perfect inversion between actual and optimal claims. Whereas 79% of all retired-worker benefit claims occurred from ages 62 through 64, only 8% of optimized claims would have been found within this range. For those curious, ages 62 through 65 (not in this order) were the least likely to result in lifetime Social Security benefits being maximized.

Comparatively, a whopping 57% of the 20,000 retired-worker claims that were extrapolated would have been optimal at age 70.

Once again, this doesn’t mean waiting until age 70 is right for everyone. If you’re a lower-earning spouse who wants to generate income for the household while your significant other’s payout grows, an early claim can make all the sense in the world. Likewise, if you have a chronic health condition that can shorten your lifespan, an early claim may be smart.

But for a majority of future retirees, the data couldn’t be clearer that waiting to collect Social Security is often the right move.

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