An Extra $2,000 in Social Security Benefits – How to Grow Your Retirement Check

Social Security Checks represent the largest source of retirement income for most Americans, and thus, it is essential that current workers strategize and do so early in order to maximize their future wages. One of the key factors in this process is determining the optimal age to start claiming Social Security benefits since the age at which a worker begins to claim benefits significantly affects the amount he will receive in retirement.

Retired workers who claim later Social Security by age 70 could see a significant increase in their monthly benefits, potentially up to $1,983 more per month compared to those who start as soon as possible. This highlights the importance of timing in maximization Social security income as well as the pitfalls that future retirees may face when presented with the many retirement options.

How claiming age affects Social Security retirement benefits

The workers have the opportunity to start the meeting Social Security benefits at age 62 (the earliest possible age to receive your benefits), however, doing so means they will not receive their full benefit, also known as primary insurance amount (PIA), until they arrive full retirement age (FRA).

Claiming benefits before you arrive FR results in a permanent reduction in benefits, delaying the past FR results in permanent growth. The exact amount of the increase or decrease depends on the exact time the benefits start. To help with this decision, Social Security Administration provides a calculator tailored to individual circumstances. It’s important to note that delayed retirement credits stop accruing at age 70, making it financially unwise to delay claiming beyond that age.

This chart below was created using data from SSA to illustrate the relationship between year of birth and FRA, and percentage of ANP taken from those claiming at age 62 and at age 70. Retired workers who claim in them FR receive 100% of their PIA.

In 2024, for example, maximum benefit of retired employees at age 62 it is $2,710 per month, while at age 70, it increases to $4,873 per month. That difference of $1,983 per month translates into a 77% increase in potential benefits simply by delaying until age 70. Although few retirees qualify for the maximum benefit, the 77% increase remains an important factor to consider.

Consider a hypothetical retired worker born in 1960 with a PIA of 1000 dollars per month. If this individual claims Social Security at age 62, their benefit would be $700 a month. However, if they delay until age 70, their benefit will increase by 77% to $1,240 per month.

Many retirees wonder if delaying benefits until age 70 is a wise decision. While it results in a higher payout, it also means fewer years of taking Social security income. Some may argue that it would be better to accept a smaller benefit over a longer period. However, in general, the answer is no. And although most people don’t qualify for the maximum benefits, in a time when every cent counts, maximizing your monthly payments can really serve you well.

For example, consider the same hypothetical person 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. This individual must choose between receiving $700 per month for 19 years or $1,240 per month for 11 years. The first option amounts to $159,600 in lifetime benefits, while the second option amounts to $163,680, about 3% higher.

Similarly, the average 62-year-old woman has a remaining life expectancy of 22 years. She must choose between $700 per month for 22 years or $1,240 per month for 14 years. The first option amounts to $184,800 in lifetime benefits, while the second option amounts to $208,320, which is nearly 13% higher.