Here’s the Average Social Security Benefit for Retirees at Age 62

As of September 2023, approximately 50 million retired workers receive a monthly Social Security check, and most consider these benefits an essential source of income. In fact, the program has lifted more than 15 million seniors out of poverty, making it the most successful anti-poverty program in U.S. history. However, individual payments vary widely, and it’s important to understand why.

Keep reading to learn about average benefits for retired workers at age 62, how they compare to average benefits at other ages, and how your claiming age affects your Social Security benefit formula.

Average retiree benefit at age 62

The Social Security Administration publishes a detailed breakdown of current benefit payments twice a year. The average Social Security benefit for a 62-year-old retired worker was $1,277 per month as of June 2023, according to the latest report. But without additional context, this number means little.

The graph below provides a basis for comparison. This details the average Social Security benefits for a retired worker from age 62 to age 70 as of June 2023.

Data source: Social Security Administration. Note: Benefit payments are rounded to the nearest dollar.

This chart draws your attention to a very important trend. The average benefit for a retired worker is lowest at age 62 and highest at age 70, and the difference between the two benefits is considerable.

This difference is the result of differences between individuals in three variables that affect the formula for calculating Social Security benefits: work history, lifetime earnings, and filing age. Retirees and current workers alike need to understand the basics of the equation.

How Social Security Retirement Benefits are Determined

Calculating Social Security retirement benefits involves two easy-to-understand steps. The first involves calculating the Principal Insured Amount (PIA), and the second involves applying reductions or credits based on claim age, as explained in more detail below.

step 1: The highest-paid 35 years of service earnings are adjusted for wage inflation and converted to a monthly average. This is known as the Average Indexed Monthly Earnings (AIME) amount. AIME is then run based on the Social Security benefits formula to determine PIA. PIA is a payment that a retired worker would receive at full retirement age (FRA).

Step 2: Retired workers who claim Social Security before FRA will have their benefits permanently reduced. This means that she will receive less than 100% PIA. Similarly, retired workers who claim Social Security after FRA will have their benefits permanently increased. That means you will receive more than 100% of her PIA.

There are only two things to note. First, a worker can become eligible for retirement benefits when she is 62 years old. That means you can’t claim Social Security earlier than that. Secondly, the worker stops receiving delayed retirement benefits once she reaches the age of 70, so there is no point in claiming after that.

The chart below shows how year of birth determines FRA and details the benefits (as a percentage of PIA) that retirees in each age group would receive if they claimed Social Security at age 62. I am.

Data source: Social Security Administration. Graph by author.

As shown above, if a retired worker born after 1960 claims Social Security at age 62, they will receive 70% of their PIA. This is a significant loss of income, but this table doesn’t tell the whole story. If the same retired worker were to delay enrolling in Social Security until age 70, she would receive her 124% of the PIA.

To understand that, let’s assume that a hypothetical worker born in 1960 has a PIA of $1,000 per month. Depending on when they claim Social Security, the worker can receive as little as $700 a month and as much as $1,240 a month. In other words, if a person born after 1960 claims Social Security at age 70 instead of age 62, her benefit amount increases by 77%.

Despite the much larger benefits available, few workers actually wait until age 70 to collect Social Security. Last year, nearly a quarter of newly eligible retirees started collecting benefits at age 62, and more than half started Social Security before FRA. Less than 10% waited until age 70.