Social Security benefits play a key role in retirement planning for lots of Americans—roughly 51 million retirees receive these benefits each month. For people age 65 and older, these monthly payments represent about 30% of their income. In October 2024, the average monthly 澳洲幸运5官方开奖结果体彩网:Social Security benefit for a retired worker was $1,924.35. But how much you actually receive each month depends in part on your age when you start receiving benefits.

How Are Your Social Security Benefits 🐈Calculate🃏d?

The Social Security Administration uses four key factors to 澳洲幸运5官方开奖结果体彩网:calculate your benefits:

• Work history: You must work at least 35 years for the most benefits.
• Earnings history: The SSA bases its calculations on your average indexed monthly earnings for your 35 highest-earning years.
• Full retirement age: This is the age at which you become eligible for full benefits. 
• Claiming age: This is the age when you actually start receiving benefits.
  

The SSA uses your average earnings during the 35 years when you earned the most money, adjusted for inflation, and applies a formula to this number to reach your basic benefit.

Your Average Social Security Be꧙nefits at Ages 62, 67, and ༒70

There are three milestones for receiving Social Security benefits: Age 62 is the earliest you can claim benefits, 67 is most people’s full retirement age, and 70 is when monthly benefits stop increasing if you delay claiming them past your full retirement age.

To see how waiting to claim your benefits can affect your payments, here are the average monthly benefit amounts in each age category, as of December 2023:

The Later the Better

If you start receiving your Social Security benefits early, you will receive less than if you wait until age 70. That difference can be immense. For example, if you are born after 1960, your full retirement age is 67. If you choose to receive benefits at age 62, you will receive just 70% of your primary insurance amount that you would receive at age 67. If you wait until you're 70, you would receive 124% of your primary insurance rate.

Say, for example, your primary insurance amount is $1,000 at age 67. If you start taking benefits at age 62, you would receive $700. If you wait until age 70, you would receive $1,240.

The Bottom Line

Social Security benefits make up an important part of your retirement income. The later you wait to start receiving those benefits, the more you could receive. However, it’s important to remember t෴hat these benefits should not be your only source of income after retirement. Investing in retirement accounts such as 401(k)s and IRAs can also provide necessary funds to help you live comfortably in retirement.