The average monthly check for retired workers is on track to cross a psychologically important level that’s not been witnessed in 90 years.
When the Social Security Act was signed into law in 1935, its purpose was to provide a financial foundation for America’s aging workforce. Nine decades later, this mission is still being fulfilled, with the added bonus of also providing protections for workers with disabilities and survivors of deceased workers.
Based on an analysis from the Center on Budget and Policy Priorities, Social Security was responsible for pulling 22 million people out of poverty in 2023, which is more than any other social program. Nearly three-quarters of these 22 million people were aged 65 and above.
For most retired-worker beneficiaries, their monthly payout is more than just income — it’s a necessity. According to 23 years of annual surveys by Gallup, Social Security income helps between eight and nine out of every 10 retirees cover at least some portion of their expenses.
Next week, when the calendar officially flips to June, Social Security retired-worker benefits will do something that’s never been seen in the program’s 90-year history.
Image source: Getty Images.
Who’s ready for Social Security history to be made?
Every month, the Social Security Administration (SSA) publishes a “Monthly Statistical Snapshot” that intricately breaks down where benefits paid in the previous month ended up.
For example, the April statistical snapshot shows that $128.736 billion in traditional Social Security benefits were doled out to 69.378 million people. Retired workers account for nearly 76% of all beneficiaries (52.587 million), with disabled workers (7.156 million) and survivor beneficiaries (5.841 million) comprising much of the remainder. If you’re wondering why these three numbers don’t add up to 69.378 million, it’s because spouses, children, and other direct relatives may qualify for benefits on behalf of a retired, disabled, or deceased worker.
In addition to breaking out how many beneficiaries received a payment, Social Security’s monthly snapshot provides the average monthly benefit for each category.
Spanning all beneficiaries, the average payout was $1,855.57 in April. But it’s the average monthly benefit for retired workers that’s just a week away from making history.
Last month, retired-worker beneficiaries took home an average check of $1,999.97. However, this average monthly payout isn’t static.
Every month, new beneficiaries are entering the pool to receive their first monthly Social Security check, and some beneficiaries pass away. Additionally, higher nominal wages paid to working Americans over time, coupled with the impact of near-annual cost-of-living adjustments (COLAs), directly affect the average monthly take-home pay for retired-worker beneficiaries.
Due to these factors, the average retired-worker benefit has always risen on a month-to-month basis, based on more than a decade of published SSA statistical snapshots. Sometimes, these increases are pronounced, such as the jump from an average payout of $1,980.86 for retired workers in February 2025 to $1,999.97 just two months later. This $19.11 increase spanning just two months potentially signals a big uptick in workers filing for benefits.
More often, the average retired-worker payout grows by $1 to $2 on a month-to-month basis, not including the one month each year when COLAs are implemented.
With the expectation that this trend remains intact, the average Social Security retired-worker benefit in May, based on the soon-to-be-reported June statistical snapshot, will surpass $2,000 for the first time in history. It’s a psychologically important figure for a program that serves as a financial foundation for many aging workers.
Image source: Getty Images.
A Social Security dollar simply isn’t what it once was
But uncorking the champagne isn’t advisable just because Social Security is making history. While nominal monthly payouts for retirees continue to climb, they’ve been doing so at a considerably slower rate than the inflationary pressures retirees have been contending with for a quarter of a century.
Beginning in 1975, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) became Social Security’s inflationary measure for doling out annual cost-of-living adjustments. With over 200 spending categories, all of which have their own respective weightings, this index can be whittled down to a single figure at month’s end, which makes for easy year-over-year comparisons to see whether collective prices are rising (inflation) or falling (deflation).
Though everything sounds kosher on paper, the CPI-W has done retirees no favors.
As its full name implies, the CPI-W is focused on the spending habits of “urban wage earners and clerical workers.” These are typically working-age people who aren’t currently receiving a Social Security benefit.
More importantly, working-age folks and retirees tend to spend their money very differently. Whereas the former spends more on education, apparel, and transportation, seniors spend a higher percentage of their monthly budget on shelter and medical care services than the typical working American. Even though an overwhelming majority of Social Security beneficiaries are aged 62 and above, the inflationary index used to calculate annual COLAs isn’t properly weighting shelter and medical care services to their needs.
The result? According to a May 2023 analysis from nonpartisan senior advocacy group The Senior Citizens League (TSCL), the purchasing power of a Social Security dollar dropped by 36% from January 2000 to February 2023. A more recent analysis from TSCL points to a 20% loss of buying power for Social Security income between 2010 and July 2024.
Even though Social Security retired-worker benefits are breaking above psychological barriers, retirees are more often than not witnessing the buying power of their Social Security income dwindle over time — and that’s nothing to celebrate.
