How retiree benefits differ in the 60s and 70s

The table below compares the average monthly benefits in the two age groups. These amounts reflect the weighted average for all retired workers in each decade as of the latest reporting period.

What drives the difference from one decade to the next

The gap between these groups does not mean individual benefits automatically rise sharply with age. More likely, it reflects the way people claim benefits in each age band. The 70s group probably includes more retirees who waited long enough to earn delayed retirement credits. Those credits increase a benefit by 8% for each year claiming is postponed past full retirement age, up to age 70.

For someone with a full retirement age of 67, waiting until 70 can boost the benefit by 24%. By contrast, the 60s group likely includes more early claimers. If full retirement age is 67, starting at 62 can reduce the monthly check by as much as 30% for life. Full retirement age generally falls between 66 and 67, depending on birth year, and it is 67 for anyone born in 1960 or later.

The Social Security Administration calculates benefits using a worker's 35 highest-earning years. The program is designed to replace roughly 40% of pre-retirement income, which is often not enough to cover retirement expenses on its own. Many retirees depend on savings or other income to make up the difference.

A 3.6% cost-of-living adjustment is slated to take effect in a future reporting period. That increase is not included in the averages above, but it would add about $51 per month to the $1,424.40 average for 62-year-olds and about $82 per month to the $2,274.68 average for 70-year-olds.

When is the right time to claim Social Security?

At first glance, the numbers may suggest that waiting to claim Social Security is always the smarter strategy. That is not necessarily true. Claiming early can make sense for people who cannot work and cannot cover their living costs on their own. It can also be the better option for those with shorter life expectancies.

If neither of those situations applies, delaying your application may be the better path. You would need to finance retirement on your own for a bit longer, but once you begin benefits, your monthly checks will be larger and able to cover more of your expenses.

Still, it is wise not to wait past age 70. Benefits do not increase after that point, so delaying further only leaves money on the table. If you are already 70 or older, contact the Social Security Administration as soon as possible, either by phone or by scheduling an appointment at your local office. You may be able to receive up to six months of retroactive benefits.

For more information on how Social Security shapes retirement, see this guide.