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Average Monthly Benefits for a Retired Worker

If you have been working for many years, no doubt at some point you’ve started to think about retirement. While the prospect of retiring and enjoying the rest of your life might seem pleasant, there are financial considerations to take into account as well. One of the biggest is will you actually be able to afford retirement — and the only way to answer that question is by knowing how much you can expect to receive in benefits from your various retirement funds, including social security.

average monthly benefit for a retired worker

How Are Monthly Benefits Calculated?

When trying to understand what to expect from your social security, it can be difficult. This is because the Social Security Administration uses a complex formula to determine your overall benefits. This calculation, in part, takes your average wages for the past 35 years (adjusted for inflation) and then awards benefits on a tiered system, where a certain percentage for one level of income is used, and a different percentage for a second level of income, etc. When all of this is totaled together, your expected monthly benefits are determined.


In addition, how long you’ve worked, and when you decide to retire, plays a big role as well. If you haven’t worked for 35 years your benefits will decrease. They will also decrease if you choose to decide before reaching the “full” retirement age of 66 or 67 (depending on your year of birth). In contrast, they can also be increased if you decide to wait a couple of extra years, with maximum bonuses being awarded for those who wait until they are 70 to start collecting monthly payments.


While this might sound complicated, the good news is that the SSA can actually keep you informed of what you can expect in the form of yearly statements that can be mailed to your address, or requested online, so you can start planning now.


What Are the Average Monthly Benefits?

With that being said, it can be hard to give a complete picture of average monthly benefits. This is because one number doesn’t necessarily take all of these factors into account. That being said, though, the average monthly payout in 2016 was $1,404. With the various situations taken into account, though, there were many who were able to bring in way more than that (with the highest possible payout being over $2,600) and some who brought in less, for many reasons. So, don’t base your retirement off of this average number.


Instead, it is important to be aware of your situation, work history, and what you can expect when you finally decide it’s time to hang up your spurs and enjoy your golden years.

If you have any questions about this, or anything else, please contact us today.