Maximizing Your Retirement | How to Boost Your Social Security Benefit by $1,983 Per Check.Social Security checks are a crucial source of retirement income for many Americans. To ensure you receive the maximum payout, it’s essential to carefully consider when to start claiming Social Security benefits.
Maximizing Your Retirement | How to Boost Your Social Security Benefit by $1,983 Per Check
This decision can have a significant impact on your overall retirement finances. In this guide, we’ll explore how your claiming age affects your Social Security benefits and why delaying retirement may be the best choice for most individuals.
The Impact of Claiming Age on Social Security Benefits
Your claiming age is one of the most critical factors in determining your Social Security retirement benefits. While you can start collecting benefits as early as age 62, doing so will result in a permanent benefit reduction. On the other hand, delaying benefits beyond your full retirement age (FRA) leads to a permanent benefit increase.
The chart below illustrates the relationship between birth year, FRA, and the percentage of primary insurance amount (PIA) received at ages 62 and 70:
Birth Year Full Retirement Age Benefit at Age 62 Benefit
|BIRTH YEAR||FULL RETIREMENT AGE||BENEFIT AT AGE 62||BENEFIT AT AGE 70|
|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%|
Source: Social Security Administration
As shown in the chart, delaying benefits until age 70 can result in a significant increase in your monthly payout. In 2023, the maximum retired-worker benefit at age 62 is $2,572 per month, while at age 70, it reaches $4,555 per month—a difference of $1,983 per month or a potential 77% boost in benefits.
Statistically, Delaying Benefits Until Age 70 Makes Sense
Some may question whether delaying retirement benefits until age 70 is a prudent choice, as it means receiving benefits for fewer years. However, statistical analysis suggests that it is indeed the optimal strategy for most individuals.
Let’s consider an example using our hypothetical retiree with a $700 monthly benefit at age 62 or $1,240 at age 70:
- Average 62-Year-Old Man: With a life expectancy of 19 years, the choice is between $700 per month for 19 years ($159,600 total) or $1,240 per month for 11 years ($163,680 total), resulting in a 3% higher lifetime benefit.
- Average 62-Year-Old Woman: With a life expectancy of 22 years, the choice is between $700 per month for 22 years ($184,800 total) or $1,240 per month for 14 years ($208,320 total), resulting in nearly a 13% higher lifetime benefit.
In both scenarios, delaying benefits until age 70 yields a higher lifetime Social Security income. Numerous detailed studies have also reached the same conclusion.
To maximize your Social Security benefits in retirement, it’s generally advisable to delay claiming until age 70. While the actual increase may vary depending on individual circumstances, the potential boost in benefits and lifetime income can significantly enhance your financial security during retirement. Consider consulting with a financial advisor to determine the best claiming strategy for your specific situation.
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