Retirees in This Age Group Get the Largest Average Social Security Checks

It's hard to overstate Social Security's importance to today's seniors. More than one-third of workers rely upon its benefits to provide at least half their retirement income and more than 10% count upon it for 90% of their income. It's only natural, then, to want the largest checks possible.

Benefit amounts vary by individual, but there are also bigger factors at play that influence how much certain age groups receive. Recent Social Security data shows that one group in particular receives more than the rest, and it reveals an interesting trend that could affect today's workers.

Image source: Getty Images.

Who gets the largest Social Security checks?

If you're not familiar, the Social Security Administration bases your benefit on your average monthly income during your 35 highest-earning years. As inflation drives up costs, average salaries tend to rise as well.

Based on this, we'd expect to see the average Social Security check rise over time, and we do -- to a point. The following table outlines the average benefit for beneficiaries of different ages as of December 2022:

Data source: Social Security Administration. Data as of December 2022.

We see this trend of younger workers earning larger benefit checks than their older counterparts until we get to the 70 to 74 age group. These workers have the largest estimated benefits, and then we see average benefits begin to drop for those under 70. That's not a coincidence.

Why are younger workers getting less?

Adults in the 70 to 74 age range above in 2022 were born between 1948 and 1952. Workers born during these years had a full retirement age (FRA) of 66. FRA is the age you must wait until if you hope to claim the full Social Security benefit you've earned based on your work history.

You can claim as early as 62, but applying sooner than your FRA shrinks your checks. Specifically, you lose 5/9 of 1% per month for up to 36 months of early claiming and another 5/12 of 1% per month if you apply more than 36 months early. Translation: Those with an FRA of 66 can shrink their checks by up to 25% if they apply immediately at 62.

Delaying Social Security increases your benefit gradually over time. Once you pass your FRA, your checks grow at a rate of 2/3 of 1% per month until you qualify for your maximum benefit at 70. That's 132% of what you'd be eligible for at an FRA of 66. Even now, delaying Social Security will increase your monthly benefit, but it's not quite as easy for younger retirees or today's workers to rake in the big checks.

Back in 1983, the government decided to raise FRA for younger adults due to rising life expectancies and Social Security solvency concerns. The following table illustrates how FRA has climbed over time:

Data source: Social Security Administration.

This means that younger workers face greater penalties for claiming early and smaller bonuses for delaying Social Security beyond their FRA. And that could account for why adults aged 62 to 69 get smaller checks than those aged 70 to 74.

Let's say there are two workers who both qualify for a $2,000 monthly benefit at their FRAs. One has an FRA of 66. Applying at 62 would reduce their benefit by 25%, so they'd get a monthly benefit of $1,500. But the other worker has an FRA of 67. They'd shrink their checks by 30% for claiming at 62, so they'll only get $1,400 per month for doing the exact same thing as the first worker, all because they were born a little later.

What can you do?

It can be stressful to think that you might get smaller Social Security checks than workers in previous generations because of a rule change. But you can still leverage the knowledge of how your claiming age affects your checks to maximize your benefit.

For many people, delaying Social Security until 70 results in the largest possible lifetime benefit and the largest monthly checks. This could be the right move for you if you expect to live into your mid-80s or beyond and have the cash to cover your expenses on your own until you're ready to apply for Social Security. But obviously, that's not the case for everyone.

Those with shorter life expectancies and those lacking the financial resources to delay their Social Security claim are often better off applying earlier. For some, this might mean settling for a smaller lifetime benefit, but that could be worth it if your monthly checks help you stay out of debt.

Those already claiming Social Security could try suspending their benefits at their FRA if they applied early. Doing this means you won't get any more checks until you either turn 70 or request that your benefits start again. During this time, you'll earn delayed retirement credits that increase your future checks. You might not wind up with as much as what some older workers get, but you can still grow your checks by an impressive 8% per year.