As long as you have paid Social Security taxes for at least ten years and are 62 years old or older, you are entitled to receive retirement benefits from the Social Security administration. The exact amount you receive every month will vary depending on a number of factors, including your earning record prior to retirement and the age at which you begin taking benefits.
In short, the earlier you take retirement benefits, the lower they will be. And vice versa, the longer you delay receiving Social Security benefits, the higher your monthly payment will be. This is applicable for the entire time you receive benefits.
This article explains how delaying retirement can help you receive more money from Social Security.
The Social Security Administration has set a “full retirement age” somewhere between 67 and 67 years old for all individuals on the basis of their birth year.
Taking retirement benefits before then is considered to be taking benefits early. Taking benefits after the full retirement age is considered to be taking them late, or delaying benefits.
This table clarifies exactly what your full retirement age is depending on your birth year.
| Birth year | Full retirement age |
| 1943 - 1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 and later | 67 |
If you begin taking Social Security benefits early, your monthly payout will be permanently reduced by a small fraction of a percent for each month before your full retirement age. In contrast, if you begin taking benefits late, your monthly payout will increase.
Up until the age of 70, delaying Social Security benefits earns an individual delayed retirement credits. These credits increase retirement benefits by 8% per year.
For example, if you were born before 1954, your full retirement age is 66. If you do not begin taking benefits until age 70, you will receive four years’ worth of retirement credits, totaling 8% times 4 = 32% higher benefits per month.
Let’s say your payment at full retirement age would have been $1,000 per month. By delaying benefits by four years, you’ll receive a monthly payment of $1,320 instead.
This adjustment is permanent, meaning the Social Security benefits that you receive for the rest of your life will be set based on this number.
As you can see, there is a significant impetus to delaying retirement benefits, helping an individual receive more money from Social Security for the rest of their lives.
The fact that delaying the age at which you begin to take retirement benefits can help you receive more money every month may seem like a definitive reason to retire as late as possible. However, this decision is more complex than that, and it’s important to make it on the basis of a careful consideration of your personal and family circumstances and financial situation.
If you expect that it is likely you will meet the average life expectancy for your birth year and gender, and you have the financial means to support yourself until the age of 70, it may make sense for you to delay retirement until then.
However, if you are ill or otherwise do not expect to meet life expectancy, it may not make sense to delay retirement benefits. And if you are not in a financial position to support yourself without the help of the Social Security payment, it is understandable that you will choose to take benefits as early as possible, even if that is before the full retirement age.
Ultimately, the exact age at which you decide to take Social Security benefits is an important, personal decision. When making it, it can be helpful to receive assistance from a Social Security expert who will be able to analyze your finances and give you a professional opinion about how to proceed.
