Current average Social Security retired worker benefits are:

For more than 80 years, Social Security has provided financial support for people who can no longer provide financial support for themselves.

America’s best retirement programs are pushing 22.7 million people above the federal poverty line each year, according to recently updated estimates from the Center on Budget and Policy Priorities. This includes 16.5 million adults aged 65 and older. Without the guaranteed monthly payments provided by Social Security, the poverty rate among seniors would nearly quadruple from 10.2% (in 2022) to 39%.

It is also an essential program to help retired workers make a living. For more than 20 years, national pollster Gallup has conducted an annual survey to measure retirees’ dependence on Social Security income. Between 80% and 90% of respondents consistently stated that their benefits accounted for a “major” or “minor” source of income.

But what future generations of retirees may not realize is that Social Security retired worker benefits are very small.

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Here’s how much the average Social Security retired worker beneficiary takes home each month:

Although Social Security has many quirks and complex rules that can sometimes be difficult to understand, calculating retired worker monthly benefits is done using four very simple factors.

Without delving too deeply into each category, the Social Security Administration (SSA) calculates your benefit using your highest earnings, 35 years of inflation-adjusted earnings (meaning wages and salaries, but not investment income). The threshold for determining whether you will receive 100% of the payment or a percentage above or below this level is your full retirement age, which is determined by your year of birth.

The last factor, your claiming age, may have the biggest impact. Depending on when you choose to receive your Social Security check, your monthly payment could be up to 30% lower than what you would have received at full retirement age. Or, if you claim later, it could increase to between 24% and 32%.

As of January 2024, the average retired worker beneficiary took home $1,909.01, or about $22,908 on an annual basis, according to a monthly snapshot published by SSA. For further clarification, the federal poverty level for individual tax filers is $15,060 in 2024.

Social Security income is designed to replace only about 40% of a worker’s pre-retirement income. That means it’s essential that future retirees get as much as possible from the program. Fortunately, there are three relatively easy ways future retirees can increase their benefits.

1. Consider working even after 35 years.

One of the smartest ways for future beneficiaries to maximize their Social Security benefits is to work for 35 years or more.

As mentioned earlier, SSA uses your 35 highest-earning years, adjusted for inflation, when calculating your monthly benefit. If you work fewer than 35 hours per year, the SSA imposes an average penalty of $0. To reap the maximum benefits from America’s best retirement program, you must work for at least 35 years.

As you get older and gain both skills and experience, your chances of earning a higher wage or salary increase, even after accounting for inflation. Working well into your 50s and 60s can help you eliminate periods of low earnings when you first entered the labor market, which can result in higher Social Security benefits.

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2. Sit back and be patient

Sometimes doing nothing is the wisest thing you can do. From ages 62 to 69, your monthly benefit can increase by up to 8% for each year you wait to receive your payment. That’s why early filers can permanently reduce their monthly payments by up to 30%, while those who file at age 70 can earn 24 to 32 percent more per month than they would at full retirement age.

What’s especially interesting about the waiting game is that comprehensive research has proven the notion that patience pays off.

In 2019, researchers at United Income used data from the University of Michigan’s Health and Retirement Study to analyze claims from 20,000 retired worker beneficiaries. The researchers’ goal was to extrapolate these claims to determine whether individuals made the “optimal” decision, that is, the decision that produced the highest outcome. lifetime income. Understand that highest monthly income and highest lifetime income may not be synonymous.

United Income’s report found that actual and optimal claims are opposites. While most workers choose to receive benefits before full retirement age, optimal claims are overwhelmingly skewed toward full retirement age or later. In fact, 70 was the optimal age for 57% of claimants studied.

Although there are good reasons to claim benefits early (for example, people with one or more chronic conditions that may shorten their life expectancy may benefit from claiming early), statistically speaking, most future claimants are It is likely that you will be compensated for the benefits you receive. patience.

3. Rely on Social Security’s little-known reemployment provisions

A third, relatively easy way for future retirees to potentially increase the amount they will receive in Social Security is the “SSA-521” (formally known as the “Request for Withdrawal of Application”).

SSA-521 is a request by a retired worker beneficiary to cancel a claim. If approved by SSA, your benefits will be credited back at a rate of up to 8% per year until you reapply for benefits.

Where the SSA-521 can be useful is if a retiree regrets filing early or gets a well-paying job just a few months after starting to receive benefits.

However, keep in mind that this Social Security mulligan has three notable limitations: First, you must file an SSA-521 no later than 12 months after you have been approved for benefits. Second, this is a one-time cancellation, so you can’t continue to stop and start your benefits if you regret making the claim. Third, you must repay all benefits received until your SSA-521 is approved. This includes any benefits your spouse or children may have received based on your income history.

Not all retirees have access to the SSA-521, but it can be useful in the right circumstances.