Social Security benefits have increased over the past 40 years, but not just because of inflation.
I won’t keep you in suspense. The average Social Security benefit for a retired worker in 1984 was $444.85.
The average 1984 retired worker’s benefit of $444.85 is equivalent to about $1,332. Meanwhile, the average retired worker’s benefit as of August 2024 is $1,920. So, it’s fair to say that Social Security benefits have significantly more purchasing power for the typical retiree than they did 40 years ago.
The short explanation for this is the amount of income that is used to compute workers’ Social Security benefits has increased faster than inflation over time. This figure, which is officially called the contribution and benefit base, is determined by changes in the national average wage index, not inflation.
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Other types of Social Security benefits have outpaced inflation
At the time, there were about 21.8 million retired workers collecting benefits, and nearly 15 million other Social Security beneficiaries. This includes categories like spousal benefits and disability benefits, among others.
Here’s a table of the averages for other major types of Social Security recipients, compared to today:
|
Type of Beneficiary |
1984 Average |
Adjusted for Inflation |
2024 Average Benefit |
|---|---|---|---|
|
Retired workers |
$444.85 |
$1,332.02 |
$1,920.48 |
|
Spousal benefits |
$228.32 |
$683.66 |
$909.78 |
|
Disabled workers |
$454.75 |
$1,361.66 |
$1,539.92 |
|
Survivors benefits |
$412.68 |
$1,235.69 |
$1,509.36 |
Data source: Social Security Administration. 2024 data as of August 2024. Inflation adjustment based on historical CPI data.
The bottom line is that Social Security benefits have grown quite a bit since 1984, and not just because of inflation. Retirees today have significantly more purchasing power from their Social Security income than they did then.