The SS benefits are modest
Social Security benefits are way more modest than most people would think, as the average Social Security retirement benefit in February 2023 was somewhere around $1,782 per month or $21,384 per year.
For someone who only received their entire adult life the average earnings and decides to retire at 65 years old in 2022, Social Security will successfully replace 37% of past earnings.
The SS’s “replacement rate” fell drastically as the program’s complete retirement age rose from 65 to 67 in only two years. Most seniors also choose to enroll in Medicare’s Supplementary Medical Insurance, also known as Medicare Part B, and have Part B premiums fully deducted from their Social Security checks.
As healthcare costs keep outpacing general inflation, those premiums might take a bigger portion out of their checks. Another reason why Social Security benefits are modest is due to international standards.
The United States ranks outside the bottom third of developed countries in the entire percentage of an average worker’s earnings that are replaced by the public pension system.
There’s way more to know about Social Security benefits, so if you’re eager to read more, here’s what we recommend: 15 Tips to Protect Your Social Security Number From Scams
