The Social Security Administration and their help towards the financial stability of retired workers and other beneficiaries.
The financial stability provided by the Social Security Administration to retired workers. (Photo: Econlib)
The Social Security Administration
The Social Security Administration has been providing financial stability for retired workers for over 80 years, lifting an estimated 21.7 million people out of poverty each year. However, the average Social Security checks given by the Social Security Administration are more modest than most people realize, as they are designed to replace only about 40% of a worker’s pre-retirement earnings.
Despite these checks given by the Social Security Administration, between 80% and 90% of current retirees rely on their monthly payout to cover some of their expenses. In October 2023, the Social Security Administration distributed about $114.4 billion in payments to around 66.93 million beneficiaries, resulting in an average monthly check of $1,709.70 or an annualized amount of $20,516.40.
Different categories of beneficiaries of the Social Security Administration, such as retired workers, disabled workers, and survivors of deceased workers, receive different monthly amounts, with retired workers receiving an average of $1,843.96 and disabled workers averaging $1,489.47. Additionally, survivors took home an average of $1,454.66 in October.
According to a published article by The Motley Fool, these amounts received by beneficiaries of the Social Security Administration will likely increase soon due to the annual cost-of-living adjustment (COLA) designed to keep benefits in line with inflation.
Average Monthly Benefit
In a published article by Yahoo Finance, the average monthly retirement benefit for Social Security recipients is $1,781.63 as of February, according to the Social Security Administration. The age at which you decide to start receiving benefits is the biggest factor that affects the amount you receive.
You can start receiving benefits at 62, but your monthly payment will be reduced if you claim before your full retirement age. The full retirement age varies depending on your date of birth, with 67 being the full retirement age for those born in 1960 or later. If we round up the current average benefit to $1,782, here’s how a hypothetical recipient’s payment would change between the start of eligibility at 62 and reaching full retirement age.
