The average monthly check for retired workers is on track to surpass unseen psychologically important levels in 90 years.
Social Security uncertainty and policy changes are driving more people to submit
With the huge increase in social security applications, retirees are facing financial decisions affected by law and economic concerns in today’s climate.
Scripps News
When the Social Security Act was signed into law in 1935, its purpose was to provide a financial foundation for the American aging workforce. 90 years later, this mission is still fulfilled, with the added bonus of providing protection to the deceased disabled and survivors.
Based on an analysis from the Centre on Budget and Policy Priorities, Social Security was responsible for separating 22 million people from poverty in 2023. This is more than any other social program. Nearly three-quarters of these 22 million people were over 65 years old.
For most retired workers’ beneficiaries, their monthly payments are more than just income, and that is necessary. According to a 23-year survey by Gallup, Social Security income helps 8-9 out of 10 retirees cover at least some of the costs.
Next week, when the calendar officially flips in June, Social Security retirees’ benefits do something that has never been seen in the program’s 90-year history.
Who is ready to create social security history?
Each month, the Social Security Agency (SSA) publishes a “monthly statistical snapshot” that is complicatedly broken down where profits paid the previous month ended.
For example, a statistical snapshot in April shows that $12.8736 billion in traditional Social Security benefits were kicked out to 69,378 million. Retired workers account for nearly 76% (52.587 million) of all beneficiaries, with most of the remaining members being disabled (7.156 million) and survivor beneficiaries (5.841 million). If you are wondering why these three numbers don’t reach a maximum of 69.378 million, it is because your spouse, children, or other direct relatives are eligible for benefits on behalf of a retired, disabled, or deceased worker.
In addition to splitting the number of beneficiaries who received payments, Social Security monthly snapshots provide the average monthly profit for each category.
Average payments across all beneficiaries were $1,855.57 in April. But just a week away from making history is the average monthly profit for retired workers.
Last month, beneficiaries of retired workers took home an average check of $1,999.97. However, this average monthly payment is not static.
Each month, new beneficiaries enter the pool to receive their first monthly Social Security check, and some beneficiaries die. Additionally, coupled with the impact of years of annual cost-of-living adjustments (COLA) the nominal wages paid to long-term working Americans directly affect the average monthly take-away pay for retired beneficiaries.
These factors ensure that average retired workers’ profits are constantly rising month by month, based on more than a decade of published SSA statistical snapshots. Sometimes these increases are notable, such as from a jump of $1,980.86 from the average payment for retired workers in February 2025 to $1,999.97 just two months later. This $19.11 increase represents a significant increase in workers applying for benefits, potentially over just two months.
More often, average retired workers’ payments increase from $1 to $2 per month per month, not including the month each year when Colas was in place.
Hoping that trend remains the same, the profits of average Social Security retired workers in May will surpass $2,000 for the first time in history, based on a soon-to-be reported June statistical snapshot. This is a psychologically important person for a program that serves as the financial foundation for many older workers.
Social Security dollars aren’t what they used to be
However, just because Social Security makes history, it is not recommended to unleash champagne. While nominal monthly payments for retirees continue to rise, they do so at a much slower rate than the inflationary pressures that retirees have been fighting for a quarter-century.
Since 1975, the consumer price index for urban wage workers and administrative workers (CPI-W) has become a social security inflation measure to eliminate adjustments to annual living expenses. With over 200 spending categories, all of which have their own weighting, this index can be narrowed down to a single number at the end of the month.
Everything sounds kosher on paper, but CPI-W didn’t benefit the retirees.
As its full name suggests, CPI-W focuses on the spending habits of “urban wage workers and administrative workers.” These are usually working-age people who do not receive Social Security benefits.
More importantly, working-age people and retirees tend to spend money very different. The former spends more on education, apparel and transportation, but older people spend a higher monthly budget on shelters and health services than typical working Americans. The overwhelming majority of Social Security beneficiaries are over 62 years old, but the inflation index used to calculate annual COLAS does not properly weight shelters and health services to suit their needs.
result? According to an analysis by the Senior Citizens League (TSCL), a senior nonpartisan advocacy group, in May 2023, the purchasing power of Social Security Dollar fell 36% from January 2000 to February 2023. A recent analysis from TSCL has lost recent purchase power for social security income from 2010 to July 2024.
While benefits for social security retirees go beyond psychological barriers, retirees often fail to see the purchasing power of Social Security income over time, which is not a blessing.
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