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Globe and Mail
4 days ago
- Business
- Globe and Mail
Here's the Average Social Security Benefit at Ages 62, 67, and 70
A study published in 2022 by the National Bureau of Economic Research concluded that more than 90% of workers ages 45 to 62 would maximize lifetime Social Security income by claiming benefits at age 70. Yet only 10% of newly awarded retirees actually started Social Security at age 70 in 2024, while more than 30% started as soon as they became eligible at age 62. Read on to see the average retired-worker benefit at ages 62, 67, and 70. The average Social Security benefit for retired workers at different ages The Social Security Administration (SSA) makes anonymized benefit data available to the public to support research and promote transparency. The chart below pulls data from a recently updated biannual report. It shows the average monthly Social Security benefit paid to retired workers between ages 62 and 70 in December 2024. Age Average Retired-Worker Benefit 62 $1,342 63 $1,364 64 $1,425 65 $1,611 66 $1,764 67 $1,930 68 $1,980 69 $2,040 70 $2,148 Source: Social Security Administration. Note: Payments have been rounded to the nearest dollar. As shown above, the average Social Security payout typically increases with age such that the average 70-year-old retired worker receives an additional $806 per month compared to the average 62-year-old retired worker. Readers should focus on ages 62, 67, and 70 because they cover the decision-making spectrum: The earliest possible claim age is 62; 70 is the latest rational claim age; and 67 provides a claim age between the two extremes. The SSA considers several variables when calculating retired-worker benefits, but claim age plays an important role. If all else is equal, retired workers will receive the smallest possible benefit at age 62 and the biggest possible benefit at age 70. Understanding how your Social Security benefit is calculated Social Security benefits are based on work history, lifetime earnings, and claim age. Precisely how the SSA uses those variables to determine benefits is detailed in the two-step process below. Step 1: The SSA determines the primary insurance amount (PIA) for each worker by applying a formula to their inflation-adjusted income. The PIA is the benefit a worker will receive if they claim Social Security at full retirement age (FRA), which is 67 for anyone born in 1960 or later. Step 2: The SSA adjusts the PIA for early or delayed retirement. Workers who claim retirement benefits before FRA get less than 100% of their PIA, and workers who start retirement benefits after FRA get more than 100% of their PIA. There are two stipulations to that rule: No one can claim earlier than 62, and there is no advantage to claiming later than 70. The chart below shows the relationship between birth year and FRA. It shows the retirement benefit (as a percentage of PIA) a worker will receive if they start Social Security at 62 and 70. In other words, it shows the smallest and largest payout for each FRA group. Birth Year Full Retirement Age Benefit at Age 62 Benefit at Age 70 1943 to 1954 66 75% 132% 1955 66 and 2 months 74.2% 130.6% 1956 66 and 4 months 73.3% 129.3% 1957 66 and 6 months 72.5% 128% 1958 66 and 8 months 71.7% 126.6% 1959 66 and 10 months 70.8% 125.3% 1960 and later 67 70% 124% Data source: The Social Security Administration. The lesson here is simple: Workers can substantially increase their retirement benefit by simply delaying Social Security until age 70. For instance, a worker born in 1960 or later will receive 77% more in monthly benefits if they claim at age 70 rather than age 62. Having said that, claiming Social Security at age 70 is not the right decision for everyone. Retired workers in difficult financial situations may be better off starting benefits at age 62. The same is true of retired workers not expecting to live beyond age 75. Readers who need personalized advice about when to start Social Security should consult a financial advisor or at least consider different scenarios using a Social Security optimization calculator like Open Social Security. The $23,760 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.
Yahoo
19-05-2025
- Business
- Yahoo
AI is storming workplaces — and barely making a difference, study says
Surely, the billions of dollars invested in AI chatbots will increase productivity and put economic performance into hyperdrive, right? Hold the phone, say researchers at the National Bureau of Economic Research (NBER), a think tank in Cambridge, Massachusetts. 'Despite substantial investments [in chatbots], economic impacts remain minimal,' they write in a new report. Economists Anders Humlum and Emilie Vestergaard estimate in the report, called 'Large Language Models, Small Labor Market Effects,' that productivity gains from AI chatbots amounted to a mere 3% in time savings. 'AI chatbots have had no significant impact on earnings or recorded hours in any occupation, with confidence intervals ruling out effects larger than 1%,' they write. Considering the corporate hype promising revolutionary change in a post-ChatGPT world — both Shopify and Duolingo announced recently that managers would need to justify hiring humans instead of using AI — the NBER report lets a lot of air out of the balloon. The researchers collected the majority of their data in Denmark, a country with high AI adoption and detailed record-keeping. They found that AI adoption had yet to lead to massive layoffs, but neither did it deliver considerable financial advantages to either employers or employees. Instead, most of the hype is based on corporate FOMO and a desire to keep up with rivals. The report says that earlier studies focused mostly on areas where the time-saving advantages of AI chatbots were most obvious, like with customer support specialists, who are being replaced en masse. Humlum and Vestergaard looked beyond the obvious and studied 7,000 workplaces that included fields such as law, journalism, bookkeeping, financial advice, and teaching. 'Software, writing code, writing marketing tasks, writing job posts for HR professionals — these are the tasks the AI can speed up,' Humlum told Fortune, saying that earlier studies weren't wrong, just incomplete. 'In a broader occupational survey, where AI can still be helpful, we see much smaller savings.' Employee time freed up by AI was used for other work tasks — including fixing mistakes created by AI in transcription, or making it difficult for students to use AI to cheat. Earlier this year, 2024 Nobel prize winner Daron Acemoglu predicted that AI adoption will increase the U.S. GDP by only as much as 1.6 percent in the next decade, while productivity would only increase 0.05 percent. 'We're still going to have journalists, we're still going to have financial analysts, we're still going to have HR employees,' he told MIT Technology Review. 'It's going to impact a bunch of office jobs that are about data summary, visual matching, pattern recognition, etc. And those are essentially about 5% of the economy.' Acemoglu went on to suggest that 'hype is making us invest badly in terms of the technology.' 'We're using it too much for automation and not enough for providing expertise and information to workers,' he said. For the latest news, Facebook, Twitter and Instagram.
Yahoo
16-05-2025
- Business
- Yahoo
Walmart helped keep America's prices low for decades. Now it's leading them higher
Walmart (WMT) has acted as a deflationary force in the U.S. economy for decades, using its massive scale and supply chain dominance — especially with low-cost Chinese manufacturing — to push prices down across retail. By demanding rock-bottom prices from suppliers and passing the savings on to consumers, it helped suppress inflation in categories across the board, from socks to shampoo. The effect was very real. In the 1990s and 2000s, economists often credited Walmart with shaving basis points off national inflation rates. Studies from the NBER and the Minneapolis Fed found that Walmart's presence consistently lowered prices by 10-25% on household staples, generating measurable gains in consumer welfare even as the retailer's effects on the overall economy were more mixed. Some estimates put the average household's annual savings from Walmart's price pressure at more than $700. Such savings created an irresistible lure for customers, helping make Walmart the world's largest retailer by revenue. Walmart confirmed Thursday that it would raise prices later this month and into the summer, citing rising costs from tariffs. It's the culmination of warnings CFO John David Rainey has been issuing for months. 'The magnitude and speed at which these prices are coming to us is somewhat unprecedented in history,' Rainey said on Thursday. While inflation cooled to a four-year low of 2.3% in April, economists now expect it to rebound to 3.3% over the next year, driven in part by importers like Walmart reaching the end of their ability to absorb cost increases. As Rainey first noted last fall, tariffs combined with currency shifts are squeezing margins in ways that can no longer be ignored. The warning landed just weeks after Walmart pulled its near-term guidance on April 9 — seven days after President Donald Trump's 'Liberation Day' tariff rollout upended global trade. While the company reiterated its full-year outlook on Thursday, it's withholding profit guidance, citing the now-familiar 'dynamic macro environment.' Yet even as costs rise, Walmart continues gaining ground. Last quarter's grocery market share growth was led by upper-income households — wealthy shoppers trading down because they're affected by early signs of a recession, or simply afraid one's set to begin. In the same way its pricing once set the tone for the broader retail sector, pressuring rivals to follow suit, Walmart's shift to raising prices allows other retailers and major brands to follow suit. Speaking to The Wall Street Journal (NWS), Harvard economist Jason Furman called it a turning point: 'This isn't Walmart taking advantage. It's Walmart having no choice.' 'That tells me that they are more afraid of their own customers and their reactions than they are of Donald Trump and his reaction,' Furman added. For consumers, the result may be unavoidable. A retailer that once defined the low-price era is now helping usher it out. For the latest news, Facebook, Twitter and Instagram. Sign in to access your portfolio
Yahoo
13-05-2025
- Business
- Yahoo
The tariff strategy is backfiring and small businesses are the collateral damage
The White House just wrapped up a victory lap for National Small Business Week, complete with talk of 'unleashing opportunity' and 'pro-growth' tariffs. But here's the thing: If you've actually run a business in the last five years, not just written a speech about one, you know that's not how any of this works. Let's skip the spin. Tariffs don't protect small businesses. They punish them. Quietly, consistently, and with compounding effect. Tariffs aren't some clever tool for leveling the playing field. They're a quiet tax that makes everything harder, especially for small businesses already navigating a minefield of rising costs, broken supply chains, and labor pressure. While political leaders paint a picture of Main Street revival, the view from the storefront is very different. Prices are up. Supply chains are unpredictable. Margins are shrinking. And now, the federal government wants a round of applause for slapping another tax on the people least equipped to absorb it. A National Bureau of Economic Research (NBER) study found that the added cost from tariffs is passed entirely onto U.S. importers. That means the burden doesn't fall on foreign competitors, it falls on American businesses, especially smaller ones with thinner margins and less leverage. Most small firms don't have backup suppliers, global negotiating power, or the financial runway to absorb these shocks. The logic behind tariffs is always the same: Punish unfair foreign trade practices, protect domestic industry, and stimulate local growth. The administration's argument is that tariffs will 'bring jobs home' and reduce foreign dependence. In theory, maybe. In practice, what they really do is sow chaos in supply chains, delay production and force business owners to make impossible choices. Raise prices and risk losing customers? Or eat the costs and hope to survive another quarter? That's not an opportunity. That's a trap. And ironically, it helps the very corporations these policies claim to check. Amazon can swallow cost increases. Walmart can reroute freight. But the family-owned coffee roastery that needs imported equipment to stay competitive? They're left holding the bag. Tariffs aren't about establishing fairness. They create barriers, especially for small businesses trying to get off the ground. In any situation where VCs feel there is systemic risk to the economy, it is harder to get them to open up their checkbooks. Startups need many rounds of capital, and if there is a perception that future rounds will be hard to come by, they will need more conviction to make investment. But with tariffs you also have to factor in the unknown about modeling profitability. How do you comfortably fund any consumer product that requires raw materials when the long-term costs for any of those businesses are unknowns? Or evaluate demand potential if part of the upside of the business is international? If policymakers actually want to strengthen small businesses, they should focus on what owners are really asking for: Lower input costs. That means fewer hidden taxes, not more. Reliable supply chains. We need infrastructure investment, not disruption disguised as patriotism. Access to affordable credit. Rates are high, and capital is tight. Entrepreneurs can't grow. Policy stability. You can't plan a product launch or sign a lease when the rules keep changing every other week. And maybe above all: Include small-business owners in policymaking. Don't just parade them out during themed weeks. I'm all for protecting American enterprise. But you don't do that by quietly making it more expensive to run a business in America. You don't do it by forcing entrepreneurs to pay more for less. And you certainly don't do it by pretending that cost inflation is a win. Tariffs may score political points. But they're a policy failure wrapped in patriotic packaging. They weaken the very people we claim to champion. Small Business week may be over but our attention should not diverge from the importance of these growing enterprises. If we want to support the backbone of the economy, we have to stop weighing it down. The opinions expressed in commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune. Read more: USA Brands CEO: Small businesses want to thrive, not just survive. That's where the tariffs uncertainty hurts the most My solution to Trump's tariffs: I'm starting a U.S. factory to save my small business The pursuit of 'lean' operations has left companies mercilessly exposed to the tariffs chaos This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-05-2025
- Business
- Yahoo
Buy stocks just when a recession is confirmed? Here's why the risk can pay off.
- Getty Images A rare contrarian stock-market buy signal with an impressive record may soon be triggered. I'm referring to the so-called 'Recession Buy Indicator,' according to which you should invest in the U.S. stock market when it's announced that a recession has begun. Based on the average lag time between when a U.S. recession starts and when it's confirmed by the National Bureau of Economic Research, such an announcement could come by this summer. (The NBER is the semiofficial arbiter of when U.S. recessions begin and end.) The NBER defines a recession as 'a significant decline in economic activity that … lasts more than a few months.' Most Read from MarketWatch It's timely to review the Recession Buy Indicator after the report that the U.S. economy shrank at an annualized rate of 0.3% in the first quarter of this year. Many economists believe that President Donald Trump's tariffs could cause the economy to shrink even further. Read: The economy has shrunk. Follow these 10 money rules for 2025 to keep your wealth from shrinking with it. The average lag time for the NBER to announce that a recession has begun is 6.8 months, based on announcement dates since 1980. (I was unable to ascertain announcement dates for recessions before then.) But there was a wide range on either side of this average, from as short as three months to as long as 11 months. It pays to be acquainted with the track record of the Recession Buy Indicator (RBI), since it triggers at the same time that you are likely to be most despondent — the moment a recession is officially announced. The accompanying chart shows the indicator's track record for all recessions in the NBER calendar, which dates back to 1857. - Since I don't have announcement dates for pre-1980 recessions, I assumed the announcements occurred 6.8 months after they began. The chart reflects the performance of the stock market in inflation-adjusted and dividend-adjusted terms, courtesy of the database maintained by Edward McQuarrie, a professor emeritus at the Leavey School of Business at Santa Clara University in California. Notice that the RBI's performance over the three months after triggering is no different than average. Though that might be disappointing, it's actually quite impressive. It means that, over the three months after the NBER says the U.S. is in a recession, the stock market performs no worse than average — far better, in other words, than what most investors would expect. And over the six- and 12-month period following an RBI buy signal, the stock market performs better than average.
