Social Security is often recognized primarily for its retirement benefits, yet it actually supports a diverse range of individuals. Beyond retired workers, Social Security provides benefits to people with disabilities, as well as to the spouses and minor children of beneficiaries, and family members of deceased workers.
The amount received by each group varies significantly. In August 2024, the average Social Security payment was $1,783.55 per month, though this figure depends on the type of beneficiary involved.
Social Security benefits by beneficiary type
The largest group of Social Security beneficiaries is retirees, who tend to receive more than the overall average. Specifically, a retired worker receives an average of $1,920.48 each month, about 8% more than the general average for all beneficiaries. However, other groups also qualify for monthly payments under the Social Security program, with different benefit amounts reflecting their unique circumstances.
Retirement benefits form the bulk of Social Security payments. Retirees account for 79.2% of total beneficiaries. In addition to retired workers, their spouses and minor children may also qualify for payments, though in smaller amounts, averaging between $893 and $910 per month. This means that, even within the retirement category, there is a range of monthly benefit amounts depending on the recipient’s relationship to the retired worker.
Survivor benefits are another significant aspect of Social Security. These benefits, which go to the family members of deceased workers, represent 8.5% of total Social Security payments. Non-disabled widows and widowers make up the largest subgroup within survivor benefits, receiving an average monthly amount of $1,784.56.
Survivor benefits serve as an essential source of income for family members after the loss of a loved one, helping them to maintain financial stability in the absence of the deceased worker’s earnings.
Disability benefits comprise 12.3% of Social Security payments and are distributed to individuals who are unable to work due to a qualifying disability. Among disabled beneficiaries, disabled workers receive the highest average payment, at $1,539.92 per month. This support is crucial for covering living expenses and medical needs for individuals who cannot engage in gainful employment.
How much of these benefits is taxable?
A lesser-known aspect of Social Security benefits is that they may be taxable, depending on the beneficiary’s overall income. While some people might assume their Social Security benefits are tax-free, those with higher incomes may find that up to 85% of their benefits are subject to federal income tax.
Beneficiaries with lower incomes might not have to pay taxes on their Social Security benefits at all. Knowing how much of your benefit is taxable can help with planning and managing any tax liabilities.
Cost-of-Living Adjustments (COLA) are an essential feature of Social Security benefits, helping to maintain their purchasing power over time. With inflation potentially eroding the real value of benefits, Social Security provides annual adjustments based on the Consumer Price Index (CPI). This adjustment ensures that benefits increase along with the cost of goods and services, protecting beneficiaries’ purchasing power in the face of rising prices.
COLA increases
COLA increases are generally modest but have been notable in recent years due to higher inflation. For example, in 2024, the COLA increase was 3.2%, largely driven by high inflation. The previous year saw an even larger adjustment of 8.7%. For 2025, experts anticipate a COLA of around 2.5%, reflecting expected inflation trends. These adjustments allow beneficiaries to maintain their standard of living even as prices for essential goods and services go up.
The maximum benefit amount a person can receive from Social Security depends on several factors, including their lifetime earnings, the age at which they choose to start receiving benefits, and any adjustments from COLA. Generally, delaying the start of Social Security payments increases the monthly amount received.
In 2024, the initial maximum monthly benefit amounts are as follows, depending on the retirement age:
- At 62 years old: $2,710
- At full retirement age: $3,822
- At 70 years old: $4,873
These figures assume that the worker had steady earnings at the maximum taxable level from age 22 onward. For 2024, the maximum taxable income is $168,600, a limit that typically rises each year. In 2025, the maximum taxable income will increase to $176,100.
Several factors can affect your Social Security benefit amount. Your lifetime earnings are directly linked to your benefit, as higher lifetime earnings generally lead to higher Social Security benefits, up to an annual maximum. Additionally, the age at which you start collecting benefits can significantly impact your monthly amount.
Although you can begin receiving benefits as early as age 62, provided you have worked at least ten years, starting before full retirement age will result in a reduced benefit amount. Conversely, waiting until age 70 to claim benefits increases your monthly payment significantly.
The decision of when to start collecting Social Security benefits is often a topic of debate, as it influences the total benefits you will receive. Many people weigh the trade-offs between starting benefits early and getting lower monthly payments, or delaying benefits and receiving a larger amount.
Social Security benefits are funded by contributions from both you and your employer. Each pays a 6.2% Social Security tax on earnings, up to the annual maximum taxable income. If you’re self-employed, you’re responsible for both shares, totaling 12.4% of your income. These contributions are essential to ensuring that Social Security can continue providing benefits to current and future generations.