Don’t expect too much from social security.
If you consider yourself a Social Security aficionado (I mean, there must be a few out there!), you might know that, as of July, the average monthly benefit for retirees is about $2,007, totaling roughly $24,000 a year. But, you might be curious about different age groups—like those retiring at 62 versus 72.
It’s a bit puzzling. Here’s a breakdown of average monthly benefits based on various ages:
| Year | Average Benefit | Average for Males | Average for Females |
|---|---|---|---|
| 62 | $1,377 | $1,521 | $1,242 |
| 65 | $1,613 | $1,782 | $1,458 |
| 67 | $1,963 | $2,176 | $1,752 |
| 70 | $2,188 | $2,431 | $1,948 |
| 72 | $2,139 | $2,362 | $1,919 |
| 75 | $2,085 | $2,296 | $1,880 |
| 80 | $2,038 | $2,237 | $1,850 |
| 85 | $1,990 | $2,170 | $1,831 |
The meaning of numbers
So, what do these figures really mean?
- There are generally fewer women than men receiving benefits, which might indicate lower overall averages for them. Women often leave the workforce to care for family.
- Some retirees receive less because they claimed benefits early. Claiming as early as 62 results in smaller monthly payments, but allows for a longer collection period.
- Conversely, some retirees receive larger payments for delaying their retirement, which can be a wise financial decision.
All in all, the take-home message here is that these amounts might not be sufficient. It’s probably unwise to rely on Social Security to cover even half of a comfortable retirement lifestyle. It’s just… not really designed for that.
And let’s not forget how the Cost of Living Adjustment (COLA) is determined—it’s based on some pretty questionable inflation measures. They track changes in household costs, like food and housing, but using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the Bureau of Labor Statistics possibly misses the mark.
What actually might be a better gauge is the consumer price index for seniors (CPI-E), since it weighs things like healthcare and housing more heavily.
