Retired workers who start Social Security after full retirement age will get a bigger payout than those who claim early.
Social Security checks are the largest source of retirement income for most Americans, so current workers should aim to maximize their future payout. Among other considerations, that means thinking carefully about when to start Social Security. Claiming age is one of the most important factors in calculating retired-worker benefits.
In fact, retired workers who delay Social Security until age 70 could see up to $1,983 more per month compared to those who claim as soon as possible. Here are the details.
How claiming age affects Social Security retirement benefits
Workers can start collecting Social Security benefits at age 62, but they’re not entitled to their full benefit or primary insurance amount (PIA) until they reach full retirement age (FRA). Claiming earlier than FRA results in a permanent benefit reduction, meaning workers receive less than 100% of their PIA. But claiming later than FRA results in a permanent benefit increase, meaning workers receive more than 100% of their PIA.
How much more or less depends on exactly when benefits start. This calculator from the Social Security Administration can be tailored to individual circumstances. But all readers should be aware that delayed retirement credits stop accumulating at age 70, so it almost never makes sense to start Social Security any later. Doing so is simply leaving money on the table.
The chart below shows the relationship between birth year and FRA. It also shows the retired-worker benefit (as a percentage of PIA) for those who claim at age 62 and age 70. Recall that retired workers who claim Social Security at FRA will receive exactly 100% of their PIA.
| BIRTH YEAR | FULL RETIREMENT AGE | BENEFIT AT AGE 62 | BENEFIT AT AGE 70 |
|---|---|---|---|
| 1943-1954 | 66 | 75% | 132% |
| 1955 | 66 and 2 months | 74.17% | 130.67% |
| 1956 | 66 and 4 months | 73.33% | 129.33% |
| 1957 | 66 and 6 months | 72.5% | 128% |
| 1958 | 66 and 8 months | 71.67% | 126.67% |
| 1959 | 66 and 10 months | 70.83% | 125.33% |
| 1960 and later | 67 | 70% | 124% |
DATA SOURCE: SOCIAL SECURITY ADMINISTRATION. NOTE: BENEFITS ARE SHOWN AS A PERCENTAGE OF PIA.
The chart above clearly indicates that it pays to delay benefits until age 70, but the following statistic really drives the point home: In 2023, the maximum retired-worker benefit at age 62 is $2,572 per month, but the maximum retired-worker benefit at age 70 is $4,555 per month. The difference is $1,983 per month, meaning workers can potentially boost their Social Security payout as much as 77% by simply delaying benefits until age 70.
To be clear, very few people actually qualify for the maximum benefit, so most retirees will not get an extra $1,983 per month, but the 77% increase remains constant.
Consider a hypothetical retired worker who was born in 1960 and has a PIA of $1,000 per month. Their benefit would be $700 per month should they claim Social Security at age 62, but that figure would rise 77% to $1,240 per month should they delay Social Security until age 70.
Statistically speaking, most retirees should delay Social Security until age 70
Readers may wonder if delaying retirement benefits until age 70 is actually prudent. Sure, claiming later means a higher payout, but it also means fewer years of Social Security income. Would it not be better to accept a smaller benefit paid over more years? Generally speaking, the answer is no.
The following scenarios illustrate why it makes more sense to delay Social Security until age 70. I use the same hypothetical person discussed in the previous section with a monthly benefit of $700 at age 62 or $1,240 at age 70.
The average 62-year-old man has a remaining life expectancy of 19 years, meaning he must choose between $700 per month for 19 years or $1,240 per month for 11 years. The first option totals $159,600 in lifetime Social Security benefits, but the second option totals $163,680 in lifetime benefits, or about 3% higher.
The average 62-year-old woman has a remaining life expectancy of 22 years, meaning she must choose between $700 per month for 22 years or $1,240 per month over 14 years. The first option totals $184,800 in lifetime Social Security benefits, but the second option totals $208,320 in lifetime benefits, which is nearly 13% higher.
Here’s the bottom line: Statistically speaking, most individuals with an average life expectancy or better would maximize their lifetime Social Security income by delaying benefits until age 70. More detailed studies have come to the same conclusion.
