Social Security Income

Social Security. Social Security is the largest source of retirement income for people age 65 or older. The payouts generally increase each year to keep pace with inflation. About half of retirees begin drawing Social Security benefits the first year they are eligible at age 62.

Payouts increase for each year of delayed claiming up until age 70. Social Security provides an average payout of $11,786 annually among those who sign up at age 62. That amount increases to $15,715 for those who sign up at their full retirement age and $19,487 among retirees who wait until age 69 to claim. The cost of buying an equivalent inflation adjusted annuity from an insurer would be about 68 percent more than the total amount of the benefits foregone from age 62 until age 66, according to GAO calculations.

Of course, people whose health or care giving responsibilities prevent them from working and those who can’t find jobs may be unable to delay their Social Security start date to get higher benefits.