Social Security: Retirees' checks top $2K for the first time

Yahoo

20 hours ago

(NewsNation) — The average Social Security benefit for retired workers hit an all-time high in May, surpassing $2,000 for the first time.
While the $2,000 mark is largely symbolic, it underscores how central Social Security has become to the retirement income of millions of Americans over the program's nine-decade history.
Monthly payments to nearly 53 million retired workers averaged $2,002 in May, up 4.5% from $1,916 a year earlier, according to the Social Security Administration.
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But that doesn't mean retirees are living large. In fact, this year's 2.5% cost-of-living adjustment, which took effect in January, was the smallest since 2020. It explains part of the rise in average check size but not all of it.
Other factors, such as demographic changes in the beneficiary pool and the implementation of the Social Security Fairness Act, have likely contributed as well.
Social Security benefits increase each year to keep pace with inflation, so a gradual rise in the average check is expected. Still, a few recent factors may be pushing payments higher.
The Social Security Fairness Act, signed into law earlier this year, boosted benefits for around 3 million people who receive pensions from jobs not covered by Social Security.
Most of those affected by the new law were expected to see their monthly checks increase by an average of $360, with some receiving up to $1,000 more each month.
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Other changes to the beneficiary pool could also be contributing to the increase in the average benefit amount — for example, if more people with higher lifetime earnings are claiming benefits or if more are filing after their full retirement age.
One thing is clear: Far more people are filing for retirement benefits now than in previous years.
The surge is partly due to demographic changes as America's population ages, but data patterns also suggest that anxiety over the Trump administration's handling of the system may be prompting some to file earlier.
The Social Security cost-of-living adjustment for 2026 could be 2.5% yet again, according to a new projection from the Senior Citizens League released Wednesday.
That estimate is based on the latest inflation data and would translate to about $50 more per month, on average, for retired workers, but it's far from set in stone.
Each year, the government determines the COLA by comparing the average inflation rate from July to September with the same period in the previous year. That calculation is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
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This year's COLA measurement window could prove especially important, as many economists expect the effects of President Trump's tariffs to start showing up in the inflation data in the months ahead.
If the president's trade policies do push up inflation between July and September, retirees could see a larger COLA in 2026 than current estimates suggest.
The recent $2,000 milestone applies only to retired workers, who comprise approximately 75% of the 69.6 million Social Security beneficiaries. Across all recipients, the average monthly benefit was $1,858 in May.
Retirement checks vary from person to person based on how long they worked, how much they earned over their career and when they started collecting benefits.
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That last variable, the age at which someone starts collecting, has been in the headlines recently due to the surge in claims. Experts worry that fear about the program's future is pushing some to claim benefits earlier than planned, often permanently reducing their monthly checks.
Filing for Social Security as early as possible can reduce annual retirement income by thousands of dollars compared to waiting.
'It's basically an irrevocable decision, which is all the more reason why people should be very cautious about when they make it,' said Charles Blahous, a researcher at the Mercatus Center at George Mason University, in an interview with NewsNation earlier this week.
Someone who turns 62 in 2025 would see their monthly benefit reduced by approximately 30% compared to what it would be at their full retirement age of 67.
Meanwhile, those who delay claiming until after their full retirement age receive an 8% increase for each year they wait, up to age 70.
In 2025, the maximum monthly retirement benefit is $2,831 for someone claiming at age 62, but it rises to $5,108 for those who wait until 70. That's a difference of more than $27,000 in annual income.
Average monthly Social Security benefit in across major categories:
Retired workers: $2,002
Nondisabled widow(er)s: $1,864
Disabled workers: $1,582
Children of deceased workers: $1,139
Spouses of retired workers: $950
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