It’s probably less than what you were hoping for, but this invaluable strategy could help you get a lot more from the program.
Traditionally employed workers pay 6.2% of their annual income in Social Security payroll taxes. That’s $3,720 per year for someone earning $60,000 annually. Over a 40-year career, that adds up to nearly $150,000.
When you pay that much into the program, it’s natural to look forward to recouping that cash as a retirement benefit. For many, that day comes as soon as they become eligible for the program at 62. But claiming then can have unforeseen consequences. The proof is in the average monthly benefit for 62-year-old claimers compared to older beneficiaries.
Here’s how much the average 62-year-old gets from Social Security
More than 590,000 seniors claimed Social Security benefits at 62 in December 2023, according to the Social Security Office of the Chief Actuary. Their average benefit was $1,298.26 per month. But this doesn’t include the 3.2% cost-of-living adjustment (COLA), which went into effect with the January 2024 payment. If we add that in, we can estimate how much these seniors receive this year:
| 2023 | 2024 | |
|---|---|---|
| Average monthly benefit |
$1,298.26 |
$1,339.80 |
| Average annual benefit |
$15,579.12 |
$16,077.60 |
SOURCE: SOCIAL SECURITY ADMINISTRATION. DATA IS BASED ON DECEMBER 2023 FIGURES FOR 62-YEAR-OLD CLAIMERS AND 3.2% COLA FOR 2024.
Even with the COLA included, these seniors’ average benefit falls well short of the $1,905.31 overall average for Social Security beneficiaries in December 2023. And there’s one big reason for that.
What’s the price for more Social Security checks?
The Social Security Administration assigns everyone a full retirement age (FRA) based on their birth year, and FRA forms an integral part of your benefit calculation. Claiming before your FRA gives you more years of checks, but it also shrinks your checks. You lose:
- 5/9 of 1% per month (6.67% per year) for up to 36 months of early claiming
- 5/12 of 1% per month (5% per year) for every additional month of early claiming beyond 36 months
The following table can help you identify your FRA and show what kind of benefit reduction you could face if you apply for benefits at 62:
| BIRTH YEAR | FULL RETIREMENT AGE (FRA) | BENEFIT REDUCTION FOR CLAIMING AT 62 |
|---|---|---|
| 1943 to 1954 | 66 | 25.00% |
| 1955 | 66 and 2 months | 25.83% |
| 1956 | 66 and 4 months | 26.67% |
| 1957 | 66 and 6 months | 27.50% |
| 1958 | 66 and 8 months | 28.33% |
| 1959 | 66 and 10 months | 29.17% |
| 1960 and later | 67 | 30.00% |
SOURCE: SOCIAL SECURITY ADMINISTRATION.
Those claiming at 62 in 2023 were born in 1961, which means the $1,298.26 average monthly benefit they received was 30% less than what they could have gotten. Had they waited until their FRA of 67 to claim, they could’ve taken home a monthly benefit of $1,854.66. But they would’ve had to cover their retirement expenses on their own for an extra five years.
That’s a bad call for those with little to no other monthly income besides Social Security. It’s also a poor choice for those with short life expectancies. If these people delay their application, they risk missing out on retirement benefits altogether.
But if neither of those things apply, claiming early will likely cost you in the long run. The following table outlines the lifetime benefit the average 62-year-old worker discussed above could get from Social Security by claiming a $1,298.26 monthly benefit at 62 versus a $1,854.66 at their FRA of 67.
| LIFE EXPECTANCY | CLAIMING A $1,298.26 MONTHLY BENEFIT AT 62 | CLAIMING A $1,854.66 MONTHLY BENEFIT AT 67 |
|---|---|---|
| 62 |
$15,579 |
$0 |
| 63 |
$31,158 |
$0 |
| 64 |
$46,737 |
$0 |
| 65 |
$62,316 |
$0 |
| 66 |
$77,896 |
$0 |
| 67 |
$93,475 |
$22,256 |
| 68 |
$109,054 |
$44,512 |
| 69 |
$124,633 |
$66,768 |
| 70 |
$140,212 |
$89,024 |
| 71 |
$155,791 |
$111,280 |
| 72 |
$171,370 |
$133,536 |
| 73 |
$186,949 |
$155,791 |
| 74 |
$202,529 |
$178,047 |
| 75 |
$218,108 |
$200,303 |
| 76 |
$233,687 |
$222,559 |
| 77 |
$249,266 |
$244,815 |
| 78 |
$264,845 |
$267,071 |
SOURCE: AUTHOR’S CALCULATIONS. ALL NUMBERS ARE ROUNDED TO THE NEAREST DOLLAR AND INDICATE HOW MUCH A PERSON WOULD HAVE RECEIVED IN TOTAL BENEFITS BY THE END OF THE YEAR IN QUESTION.
Based on this, claiming early would lead to a larger lifetime benefit for someone with a life expectancy of less than 78 years. But after this age, the balance tips in favor of those who delay their Social Security application — and you don’t have to stop at your FRA.
Once you’ve passed this age, your checks grow by 2/3 of 1% per month (8% per year) until you qualify for your maximum benefit at 70. That’s 124% of what you’d get at a FRA of 67, or 132% of what you’d get at a FRA of 66.
As you might have guessed, you’d have to live even longer to make delaying beyond your FRA worthwhile. You also need to cover even more of your early retirement expenses on your own if you plan to delay Social Security until 70.
These are options worth weighing if you hope to maximize your lifetime Social Security benefit, but it’s also fine to claim at 62 if you’re more comfortable with this. You’ll likely still wind up with hundreds of thousands of dollars in benefits. Just make sure you understand the trade-offs before you apply. Once you start claiming Social Security, it’s difficult to undo your decision.
