Social Security is a big part of many retirees’ financial plans. Knowing how much you can expect helps you budget better and feel more secure about your future.
While the amount you receive each month can vary a lot, having an idea of the average amount at certain ages gives you a good starting point for planning.
As of January, the average monthly Social Security benefit for retired workers was $1,979. However, for people who are 72 years old, the average monthly payment was higher, at $2,023. Let’s look at why this is and how Social Security benefits are calculated.
What Affects Your Social Security Benefits?
Your Social Security payment depends on two main things: your lifetime earnings and the age you decide to start taking benefits.
Lifetime Earnings and Social Security
The more you earn during your working years, the higher your Social Security benefits will be.
This is because Social Security payroll taxes are taken out of your earnings, and people who earn more pay more into the system. As a result, they receive higher benefits in retirement.
However, there is a limit to how much income is taxed for Social Security, called the wage base limit. If you earn more than this limit, that extra income doesn’t count toward your benefits.
When You Claim Your Benefits Matters?
The age you start receiving Social Security also affects how much you get each month. You have a choice: you can start as early as age 62 or wait until as late as age 70.
If you claim your benefits before your Full Retirement Age (FRA), your monthly payments will be lower. On the other hand, if you wait until after your FRA, your payments will be higher.
Your FRA is the age at which you’re entitled to receive your full benefit amount, known as the primary insurance amount. If you start benefits earlier, they are reduced.
If you delay, they increase by about 2/3 of 1% per month, or about 8% per year, until you reach age 70. After 70, the benefits stop increasing, so most people claim by then.
Why Are Benefits Higher at Age 72?
The average benefit for people who are 72 years old is higher than the overall average for all retirees. There are a couple of reasons for this.
Higher Lifetime Earnings
Some 72-year-olds had higher earnings during their careers, which means they paid more into Social Security and now receive larger benefits.
They might have had long careers with steady income growth, leading to a higher benefit amount.
Delayed Claiming for Maximum Benefits
Another reason is that some people wait until they are 70 to start collecting Social Security. By delaying their benefits, they get an increase of about 8% per year after their FRA.
This means that someone who waits until 70 to claim benefits will receive about 24% more than someone who started at 67. This higher amount continues for the rest of their life.
How to Estimate Your Own Social Security Benefit?
If you’re planning for retirement, it’s a good idea to estimate your own Social Security benefit. You can do this by looking at your lifetime earnings and deciding when you want to start taking benefits.
The Social Security Administration (SSA) provides an online tool called the Social Security Retirement Estimator.
This tool uses your actual earnings record to estimate your future benefits. You can enter different retirement ages to see how your monthly payments will change based on when you start.
Read More:
- Don’t Lose Your Social Security Benefits: What Happens If You Don’t Pay Off Debts?
- Social Security COLA 2026: What’s Coming and How It Affects You?
Planning for Retirement with Social Security
Knowing the average Social Security benefit for people aged 72 can help you make better financial plans.
However, remember that your actual benefit may be different. It depends on your earnings when you claim, and other factors like cost-of-living adjustments.
If you want to maximize your Social Security income, consider delaying your benefits if possible. Waiting until age 70 gives you the highest monthly payment.
However, your health, financial situation, and retirement goals should all play a role in your decision.
Final Thoughts
Social Security is an important source of income for many retirees.
At age 72, the average benefit is $2,023 per month, which is higher than the overall average for all retired workers. This is mainly due to higher lifetime earnings and delayed claims.
To get the most out of Social Security, understand how your benefits are calculated and use tools like the SSA’s estimator to plan your retirement income.
By doing this, you can make informed decisions about when to start receiving benefits and how to budget for your retirement years.
Social Security may not cover all your expenses, so it’s also wise to save in other ways, like through personal savings, pensions, or retirement accounts. With good planning, you can enjoy a more comfortable and financially secure retirement.
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