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FINANCIAL NEWS

What is the average monthly Social Security benefit for a retired worker?

Social Security offers a vital form of monthly income for retired Americans and more than 50 million retirees take advantage of the federal support program.

Update:
Social Security beneficiaries could get huge COLA increase for 2023
Fred ProuserREUTERS

The Social Security Administration (SSA) provides a wide range of programs designed to provide financial support for Americans. However it is the agency’s retirement benefits that are by far the most widely utilised, and which provide a “replacement income for qualified retirees and their families.”

In May 2022 around 70 million people received some form of support from the SSA, of which more than 50 million claimed retirement benefits, a whopping 71.4%.

Figures from the SSA state that the current average monthly benefit for a retired worker is $1,621.27.

Spouses of retired workers get $836.19 on average, while children of retired workers typically get $786.70.

Social Security retirement is the main source of income for elderly Americans

The retirement support provided by Social Security was designed to ensure that elderly people are able to cover the cost of essentials and it now plays a vital role in the finances of older Americans. Data published by the SSA last year found that roughly nine out of ten people aged 65 or older in the United States were receiving a Social Security benefit.

Across the country, around 30% of the total income of the elderly comes from Social Security benefits. Furthermore, 37% of men and 42% of women get a majority of their income from Social Security programmes.

What are the future prospects for the Social Security retirement benefits?

Social Security is able to provide vital support for the vast majority of elderly Americans because it is paid for with monthly contributions from nearly all adults in work in the United States. There are dedicated trust funds to cover the costs, but a change in demographics in recent decades could threaten the long-term viability of the programmes.

Estimates now suggest that, using the current model, the trust funds will only be able to pay the full benefits entitlements until 2034. After that point recipients will receive just 75% of their benefits, a huge decrease for elderly Americans who are relying on the support for their retirement.

Legislation proposed by Rep. John Larson, Social Security 2100: A Sacred Trust, aims the address the imbalance and ensure that Social Security will be able to remain for decades to come. He has called for the funding model to be restructured, removing the clause that lowers the rate of taxation for high earners.

His aim is to extend the solvency of SSA programmes by halving the shortfall in the Social Security Trust Funds.

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