By the time you sign up for Social Security, you've already paid into the program for decades. You would want to get the most out of it. You may have heard that delaying benefits until 70 is the best way to do it. It's not the best option for everyone.
Here is a closer look at how your age affects your benefits.
The image is from the same source.
Why wait until 70?
You become eligible for Social Security at 62, so the idea of putting off your benefits might seem strange to some. Why would you want to miss out on the guaranteed income? The answer has to do with how your benefits are calculated.
Everyone is assigned a full retirement age based on their birth year. It's between 66 and 67 for today's workers. If you want the standard amount you've earned, you have to wait until then.
Signing up early shrinks your benefits. Those with an FRA of 67 who sign up at 62 get 70% of their standard benefit per check, while those with an FRA of 66 only get 75% per check.
Those who delay benefits see their checks grow a little bit every month until they reach 70. They get their maximum benefit after that. If your FRA is 66 or 67, that's 132% of your standard benefit per check.
To put this in perspective, let's say you qualify for an average benefit of $1,563 per month. If you wait until 70 to sign up, you'll get $1,938 per month.
Wouldn't you rather delay until 70?
It can seem like the obvious choice now that you know the benefit of delay. You're sacrificing a few years of benefits for a bigger benefit in the future. Delaying benefits is often the more lucrative option for seniors who live into their 80s. It helps them get more out of the program than if they sign up right away.
There is a big if there. If you don't make it into your 80s, you should sign up for Social Security sooner.
The table shows how much you'd get from Social Security at various starting ages, if you qualified for the average benefit. If you delay until 70 you'll get a benefit of $1,938 per month. The figures show how much you would have received by the end of the year.
The age.
Starting at 62.
Starting at 67.
At 70.
62
$13,128 was paid by the government.
$0
$0
63
There is a price of $26,252.
$0
$0
64
$39,384 was paid for.
$0
$0
65
The price was $52,512.
$0
$0
66
$65,640.
$0
$0
67
$78,000.
$18,755.
$0
67
$91,856
$37,512 was the amount of money.
$0
69
$110,020.
$56,258.
$0
70
$118,152.
$75,024
$23,252.
71
$131,280 was spent by the government.
$92,780
$46,512 was the total.
72
$137,408
$112,536.
$68,768.
73
$167,536.
$131,292 was spent by the government.
$93,024 was paid by the government.
74
$170,664.
$150,048 was spent.
$116,320.
75
$183,793.
$168,804
$139,500
76
$196,920 was spent.
$187,560 was spent.
$162,793.
77
$210,048
$206,316
$186,048 was spent.
78
$223,000
$225,072
$209,000
78
$236,304 was spent by the government.
$243,832.
$232,560 was spent.
80
$249,432
$262,584.
$255,616.
81
$262,560.
$271,340.
$279,072.
81
$275,688.
$300,096 was spent.
$302,328
83
$298,616.
$318,852.
$325,584 was spent.
84
$301,944 was spent by the government.
$337,608
$348,840 was spent.
85
$315,782
$356,368.
$372,096 was spent.
Calculations by an author.
If you believe you'll die before 78, you'll get the biggest benefit from claiming at 62. Delaying benefits leads to more money overall. If you're planning to delay until 70, you'd have to be pretty confident that you'll live until at least 82 for this to be worthwhile.
You can't be sure how long you'll live. You just have to guess. Some people prefer to sign up somewhere in the middle to hedge their bets. If you want to enjoy some of the benefits of delay without waiting until you're 70, this is another option.
Even if you're decades away from claiming Social Security, you should come up with a plan. To get a personalized estimate of how much you can expect from the program, you need to create a my Social Security account. You can make a table to figure out which starting age will give you the most money.
Knowing how much you can expect from the program will help you figure out how much you need to save on your own for retirement. Changes can be made over time to help keep you on track. It's a good idea to make sure you don't run into any unpleasant surprises when you retire.
