One Move Could Add Over $1,000 a Month to Your Average Social Security Benefit

Many retirees need Social Security to cover their essential expenses. You should know that the age you claim benefits at could play a big role in what you’re paid each month. 

There’s one specific move that could make a difference of $1,000 or more in your monthly Social Security income. Here’s what it is and how to plan for it.

Filing late could make you a lot richer

If you earn enough work credits in your lifetime, you can claim Social Security benefits once you turn 62. However, you will not receive your benefits without a reduction until you hit full retirement age (FRA), which is 67 if you were born in 1960 or any year after that. 

If you file for Social Security at 62, your monthly benefits will get reduced by about 30% compared to waiting until 67. And that reduction is permanent.

On the other hand, you can receive delayed retirement credits if you file for Social Security after reaching FRA. For each year you wait, your benefits grow 8%. You can collect those credits until you turn 70.

If you do the math, you may find that the difference between claiming Social Security at 62 versus 70 amounts to more than $1,000 on a monthly basis. 

The average monthly benefit today is about $2,081. If you’re eligible for that benefit at age 67 but you file for Social Security at 62 instead, you’ll reduce that payment to $1,457. If you delay Social Security until age 70, you’ll increase that payment to $2,580.

All told, that’s a difference of $1,123. 

The difference between claiming Social Security at 62 versus 70 may be more or less than that total, since it depends on the monthly benefit you’re eligible for based on your personal income history. But the difference could be quite significant.

How to claim Social Security at 70

Filing for Social Security at 70 isn’t just a matter of sitting tight and waiting patiently until that age. It’s something you do need to plan for.

A lot of people struggle to stay in the workforce beyond a certain point. If you know you intend to claim Social Security at 70, you may want to make an extra effort to keep your skills current so you don’t end up forced out of a job. You may also want to line up some backup income streams so you’re able to keep working until age 70.

Another option is to build enough retirement savings so you’re able to end your career in your mid or late 60 but hold off on claiming Social Security until age 70. 

Remember, too, that even if you can’t delay Social Security until age 70, waiting until at least FRA could put much larger monthly checks in your pocket. And if you can wait until age 68 to file for benefits instead of 67, you’ll at least get an 8% boost to your benefits instead of the full 24% boost you’d get by holding off for the full three years.

It’s not always easy or possible to delay Social Security all the way until 70, but even waiting a little bit longer to file could result in larger benefits for life.