A very common age to apply for Social Security could be harming retired workers, and that’s why it’s crucial to be informed to make a decision that could positively or negatively impact the rest of your life and that of your spouse.
And it is no small thing that, for most Americans, Social Security plays a primary role in consolidating financial security during retirement. Surveys by the Gallup consulting firm revealed that between 80% and 90% of retirees depend, to a greater or lesser extent, on their monthly benefits to cover at least part of the expenses.
Why Many Americans Retire at Age 66?
Many retirees in the United States choose to retire at the age of 66 due to several reasons, among them the fact that at that age you can choose to receive the maximum Social Security benefit, which means that you will receive higher monthly payments compared to retiring at a younger age. Some workers who retire before age 66 face penalties on their Social Security benefits if they continue to work or have additional income.
The Social Security Administration uses four simple but determining variables to calculate the benefits of a person who is claiming his retirement: his earnings history, his work history, his full retirement age and the age at which he is claiming. The SSA looks at the 35 years of highest earnings adjusted for historical inflation. Keep in mind that only earned income, such as wages and salaries, not investment income, counts towards the calculation of your retirement.
And since the SSA is looking for your best 35 years of payments, then if you have one year missing for your calculation, $0 will be averaged for each missing year, and this means that you are going to see reduced payments. So, if you’re hoping to maximize your monthly or lifetime pay, you’re definitely going to want to work at least 35 years, or more if possible.
The Average Retirement Benefit at Age 66 in 2024
According to the most recent SSA data, the average retired worker, who retires at the age of 66 in December 2023, can expect to earn $1,739.92, or about $20,879 in a year. Keep in mind that this average payment is based on the age of the beneficiaries until December 2023, and that in the year 2024, with elements that come into play such as inflation and the cost of living, the number could change.
Now, depending on the year of birth, you can receive from 93.3% to 100% of the possible benefits (for a retirement age of 66), as explained in the following list:
- 1943-1954: 100%
- 1955: 98.9%
- 1956: 97.8%
- 1957: 96.7%
- 1958: 95.6%
- 1959: 94.4%
- 1960 or later: 93.3%
Now, if you wait until age 67, you can get up to 108%, according to the following list:
- 1943-1954: 108%
- 1955: 106.7%
- 1956: 105.3%
- 1957: 104%
- 1958: 102.7%
- 1959: 101.3%
- 1960 or later: 100%
Some beneficiaries who opt for higher ages can receive up to 132%, such as people born between 1943 and 1954, who can claim that percentage: that is a real safeguard to have a beautiful retirement with all the housing, food and health concerns covered.
That is why experts recommend delaying the retirement age as much as possible, so that the percentage to be collected is the highest possible.
