June 10, 2012

History of Average Social Security Benefits 1956 to 2010

The very first social security check was received by Ida May Fuller for $22.54 back in 1940.  Today the average benefit is around $1175 a month.  I thought it would be interesting to look at how the monthly benefits have changed over time as well as compare how much social security benefits compare to overall income levels.

I got the data out of the Social Security Annual Statistical Supplement for 2011, specifically in Table 5.B8 

Here's a graphic representation of the average monthly retirement benefit for Social Security.  Note this is the average for all beneficiaries and combines people getting full retirement benefit and those who took early benefits.

Ok, you can see its gone up over time.   But thats a long period and inflation and increased wages would cause increases in social security.   Lets look at how social security compares to the median household income over a time period.   I couldn't quickly find older median income data so I'm just going to go back to the 70's for these charts.

Median income has gone up at a different pace and isn't as consistent.   Thats a little more due to the relationship between income and the economy in general.

Here's how much of a percentage of median income the average social security represents:

You can see it drifted around 25% for a few decades from 1980 to 2008.   Then post 2008 the % increased a bit but thats mostly due to a drop in the median incomes.

The law defining social security hasn't changed significantly since 1983.   So I'm assuming the changes in the benefits since then are mostly due to changes in incomes and demographics.


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