Key Points
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The Social Security Administration assigns everyone a full retirement age (FRA) based on their birth year.
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Every month that you delay Social Security increases your checks.
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For most people, delaying Social Security beyond 65 would result in a larger lifetime benefit.
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The $23,760 Social Security bonus most retirees completely overlook ›
You save diligently for retirement throughout your career. You carefully build a budget that will help you stretch those savings over an uncertain life expectancy. So it only makes sense that you would approach your Social Security claiming age with just as much care.
There’s technically no wrong age to apply for Social Security. But there are definitely some ages that could lead to larger lifetime benefits than others. Research consistently surfaces one claiming age as the most beneficial for most Americans, yet only about 10% of people actually sign up then.
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If you hope to optimize your Social Security benefits and improve your standard of living in retirement, it pays to understand how your claiming age affects your checks and how to choose the right time to apply.
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How your claiming age affects your Social Security benefits
You become eligible for Social Security when you turn 62, but you don’t have to sign up then. Technically, it’s considered early claiming because you’re under your full retirement age (FRA). This is 67 for most workers today, though if you were born before 1960, you could have a lower FRA.
Every month you receive benefits under your FRA shrinks your checks, first by 5/9 of 1% per month (6.67% per year) up to 36 months and then by 5/12 of 1% per month (5% per year) for every additional month of early claiming. For someone with an FRA of 67, that means your benefit will be 30% smaller if you sign up right away at 62 than it would be if you’d waited another five years to apply.
You can also delay your checks past your FRA and they’ll grow by 2/3 of 1% per month (8% per year) until you reach 70. You still aren’t required to start Social Security at that point, but there’s no incentive to delay any longer because your checks won’t grow any further.
Waiting is often your best move
The right claiming age for you depends on a few factors, including your health and life expectancy. Generally, those with short life expectancies get more out of the program by claiming early. And those who lack personal savings may have no other option than to claim as soon as they can.
But if you can afford to delay and you expect to live into your 80s or beyond, delaying Social Security for at least a few years could lead to a larger lifetime benefit. A 2022 National Bureau of Economic Research study found that virtually all Americans aged 45 to 62 would do better to wait beyond age 65 to collect, with more than 90% getting their largest lifetime benefit at age 70. However, only about 10% of people sign up then.
While people are waiting longer on average to apply for Social Security, it can still be difficult to cover your expenses on your own until 70, especially if you retire sooner than this. But it could be doable with the right strategies.
If you’d like to delay your Social Security claim until 70, make sure you’re saving enough to cover all of your living expenses during your early years of retirement. Or consider a phased retirement where you gradually reduce your hours in the workforce rather than retiring all at once. This way, you’ll have some income from a paycheck to supplement your personal savings.
And if delaying until 70 isn’t an option for you, that’s OK. Even waiting a few months can lead to permanently larger checks. Think about how long you’re comfortable paying for your expenses on your own and use that to guide your decision about when to sign up for Social Security.
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