Social Security was never intended to replace 100% of a worker’s income during retirement. However, among older Social Security recipients, about 12% of men and 15% of women still depend on Social Security benefits for 90% or more of their income.
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Whether Social Security is your main source of income or just a supplement to your personal savings, there are steps you can take to maximize your benefits. One of them is to defer the application until age 70, which is the latest age at which you can apply for benefits. This is the average Social Security payment at age 70, along with a brief description of how the benefits work.
Average Social Security benefit at age 70
As of December 2021, the most recent year for which data is available, the median Social Security benefit at age 70 was $1,768.94. This represents an 8.3% increase from December 2020, when the median benefit for a 70-year-old was $1,632.82.
Keep in mind that the average Social Security benefit at age 70 is, by definition, higher than the average Social Security benefit for all retirees, since age 70 is the maximum age at which you can apply for benefits. As of January 2022, the overall average benefit was $1,657.
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How early can you claim Social Security?
The earliest you can apply for Social Security benefits is age 62. However, your monthly benefit will be permanently reduced. This is most clearly demonstrated in the data, which shows that the median benefit for people age 62 as of December 2021 was $1,259.85.
Of course, this does not necessarily mean that filling at age 62 is a bad strategy. Although your benefits take a significant hit, you’ll also earn that money over a much longer period of time. Claiming benefits at age 62 instead of 70 means you’ll receive an additional 96 monthly payments. This goes a long way to offset the lower checks you will receive.
Since the right strategy for claiming Social Security depends on a number of individual variables, such as your health and personal financial situation, it’s always best to talk to a financial advisor about your options.
What are the benefits of waiting to apply until age 70?
The main benefit of waiting to apply for Social Security until age 70 is that your benefits receive a permanent and substantial increase. Waiting to file at age 70 instead of the “full retirement age” of 67 means your benefits will increase by 24% or 8% per year.
The comparison is even more dramatic if you compare filing at age 70 instead of the first allowable age of 62. Although each individual’s situation will be different, the Social Security Administration provides an example where filing at age 62 instead of 70 resulted in a 77% benefit reduction.
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This article originally appeared on GOBankingRates.com: What is the average Social Security benefit at age 70?
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