By the end of 2023, a typical 67-year-old US citizen is likely to receive a monthly Social Security benefit of about $1,883.50, totalling $22,602 annually. This estimate assumes that the individual begins to collect benefits at full retirement age and represents an increase from the average payout of $1,543.87 per month or $18,526.44 annually in 2020.
Such increases are chiefly a result of annual Cost-of-Living Adjustments (COLA), designed to help Social Security beneficiaries keep up with inflation. The exact benefit amount each individual receives is based on their lifetime earnings and the age at which they start receiving benefits.
The Social Security Administration encourages people to have additional forms of retirement income aside from Social Security. Therefore, it is beneficial to have savings, investments, or pension benefits alongside Social Security. To manage retirement income and long-term financial security effectively, informed decisions about when to start collecting Social Security benefits are crucial.
Considering current social security payouts and future projections is crucial for those planning for retirement. It’s advisable to review social security retirement benefits, understand the projected figures, and plan a retirement budget accordingly.
Gender, too, impacts Social Security benefits. Typically, men of this age receive a higher monthly average benefit ($2,903.70 or $34,844.40 annually) compared to women ($1,676.20 per month or $20,114.40 annually).
Projected increase in US social security benefits by 2023
These discrepancies are often attributed to differences in lifetime earnings, working years, and the age at which retirement benefits are claimed.
Claiming benefits earlier than the full retirement age may result in reduced payments. That’s why many people delay retirement, aiming to maximize their monthly benefits. However, the choice of when to retire is a highly individual decision. Factors like health status, financial stability, and personal preferences should be considered, preferably in consultation with a financial advisor or retirement planner.
Additional strategies can contribute to higher monthly Social Security benefits. These include delaying benefit collection until the age of 70, working a minimum of 35 years, and coordinating benefits with a spouse. Moreover, enhancing income can increase SSA benefits as they are based on your highest-earning 35 years. Regularly checking Social Security statements can rectify any inaccuracies, ensuring that the beneficiaries receive the maximum benefit possible.
Despite Social Security benefits providing a safety net, it’s essential to recognize that they are not intended to replace the need for rigorous retirement savings. Apart from exploring opportunities for continuing education and skill advancement for higher wage jobs, staying updated with SSA policies is vital for making informed decisions about retirement plans.
