The Average Social Security Check Is $2,086, But The Max Is $5,181. Here’s What Separates Them
Most retirees collect a fraction of what Social Security actually allows, and the gap between a typical check and the maximum is staggering. Two surprisingly controllable factors determine which side of that divide you land on.
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There’s a reason people are often cautioned not to retire on Social Security alone. The average monthly retirement benefit today is $2,086. On an annual basis, that’s roughly $25,000, which may not be enough to cover a modest set of expenses in full.
But some Social Security recipients are eligible for a monthly benefit of $5,181. On an annual basis, that’s a $62,000 income, which clearly offers a lot more buying power than $25,000.
Most Social Security recipients, however, aren’t eligible for the program’s maximum monthly benefit. And there’s a big reason for that.
The two factors that keep retirees from getting Social Security’s maximum paycheck
The reason most seniors don’t get $5,181 a month from Social Security, which is the maximum benefit payable in 2027, boils down to two factors:
- Filing age
- Lifetime wages
To score Social Security’s maximum benefit of $5,181, you need to earn the equivalent of the program’s wage cap for 35 years or more. You also need to delay Social Security until age 70.
Most people don’t do either of these things.
AARP says that under 10% of Social Security recipients delay their claims until age 70. And most people earn way below the wage cap during their careers.
For context, this year’s wage cap is $184,500. Earnings beyond that point don’t get taxed for Social Security purposes.
How to make the most of a smaller Social Security check
If your Social Security check in retirement is closer to $2,086 than $5,181, it doesn’t mean your senior years are doomed to be financially stressful. It just means you may need to manage your expenses more carefully and find ways to supplement your monthly benefit checks.
If you have savings in an IRA or 401(k), withdrawals coupled with Social Security could lead to a more generous income. If you don’t have savings, working part-time could be an option.
You’re allowed to work while collecting monthly benefits from Social Security, though there is an earnings limit to be mindful of if you’re receiving benefits prior to full retirement age (FRA). FRA is 67 for anyone born in 1960 or later.
It also pays to be mindful of your spending if your monthly Social Security check is close to the average benefit today. That could mean canceling rarely used subscriptions, being smart with utility usage, and seeking out low-cost or free entertainment whenever possible. Downsizing may also be something to consider if you’re looking at higher housing costs.
Of course, if you’re nearing retirement and are worried you won’t have enough income, delaying Social Security is an option to look at. For each year you wait to file beyond FRA, your benefits grow 8%, up until age 70. Even though most seniors don’t wait that long, you could choose to be an outlier and score larger monthly checks for life.
There’s clearly a huge gap between Social Security’s average monthly retirement benefit and the maximum check seniors can collect this year. But understanding why it exists and managing your income strategically could help you thrive in retirement despite receiving a smaller amount.
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Maurie Backman has more than a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. Her work has appeared on sites that include The Motley Fool, USA Today, U.S. News & World Report, and Kiplinger.
Prior to becoming a full-time financial writer, Maurie worked in the financial industry trading distressed debt. She then changed course and spent a few years designing electronic toys. After a stint in content marketing and UX, she shifted back into writing and has since covered everything from the housing market to estate planning to Medicare.
When she's not busy writing, Maurie can be found hiking, walking her dogs, driving her kids to their various sports practices and games, and curling up with a good book. She cooks on occasion and bakes way too often.
