The monthly social security benefit received as an American is an average of $1,782.74. As recipients, you should know that your Social Security benefit will be lower than the average retiree’s, as their monthly payment is pegged at an average of $1,919.40. The payment received by the average retiree is about 8% higher than yours as a social security recipient.
Why is there a difference in both payments?
The difference between the payment you receive as a social security beneficiary and an individual who receives retirement benefits depends largely on the kind of allocation that both sets of beneficiaries would receive.
To paint the picture, as a beneficiary of social security, your payment is determined by certain criteria, such as age, disability, and what you can receive as an essential person. These are payments whose increase cannot be increased or decreased by your input into the system.
However, recipients of retirement benefits receive their monthly average payment of $1919. 40 actively contribute to the payments they receive upon retirement in their active years of working. These contributions are made via various retirement plans, including the Profit Sharing Plan, the 401(k) plan, or the simplified employee pension plan.
More than this, retirement benefits can also be increased if the recipient decides to extend the age they would like to start receiving the benefits from the statutory age of 65 to age 70. This will see their retirement benefit increase slightly but significantly, making it even higher than the social security payment you can receive if you are aged, disabled, or an essential person.
Will social security benefits increase in the coming year?
It has been speculated that there might be a significant increase in security benefits that will also affect the retirement benefits in 2025. This is because the cost of living adjustment (COLA) will most likely be reduced from the current 3.2% that it is to 2.7%.
The new rate in COLA will then bring the retirement benefit of retirees to $1968, which is almost a $50 increase in the year 2025. The new rate, which will add more money to the purses of the beneficiaries, is still estimated and has not been set in stone, but it does give a glimpse into what the future of payments will be if you do receive social security in the form of retirement benefits or disability checks.
With the information regarding the payment and cost of these benefits, you can now understand why the average retiree earns more and how you can also plan your income as a recipient of social security benefits in the US.
