With an unstable economy and seniors losing purchasing power on their Social Security benefits, there is a sense of gloom looming over those who are about to retire and face the financial difficulties that come with a fixed income and meager savings. But despairing is not the answer, some strategic planning can significantly increase your monthly Social Security benefits, which is crucial as even now millions of retirees depend on these benefits for the majority of their income.

Maximizing your Social Security benefits requires careful consideration of when to begin claiming them and the decisions that you make now regarding how to manage them directly impacts the monthly benefit amount you receive for the rest of your life, so patience in this context can be highly rewarding.

In 2024, the average monthly Social Security benefit for retired workers was $1,913.31 and the age at which you choose to start claiming Social Security benefits is one of the factors that greatly influences this amount. If you opt to claim benefits at age 62, the earliest age possible, your monthly payments will be reduced by approximately 30% compared to waiting until your full retirement age (FRA), which, for individuals born in 1960 or later, the FRA is 67. This loss of benefits is not temporary, it is permanent and will affect every increase that you receive from then on as your “base amount” will always be that 30% lower.

Alternatively, you can delay claiming Social Security benefits past your FRA, and for each year you wait, up until age 70 (after this your benefits no longer increase), your monthly benefits will increase by 8%. For instance, if you are entitled to the average benefit of $1,913.31 at an FRA of 67, claiming at age 62 would reduce this amount to $1,339.32. However, delaying until age 70 would increase your monthly benefit to $2,372.50. Thus, postponing your claim from age 62 to 70 could result in an additional $1,033 each month during retirement.

Should you delay your Social Security claim until your 70th birthday?

Even though the numbers may make your think that waiting is always the answer, the truth is that the decision to delay claiming Social Security benefits until age 70 is not universally advantageous. If you have serious health issues and a shorter life expectancy, claiming benefits early may be financially beneficial, as it could lead to a higher total lifetime income and a more comfortable retirement that you can enjoy when your health still allows you to. Additionally, if early access to Social Security funds allows you to invest in opportunities such as starting a business, claiming at age 62 could be a wise choice as it would give you some stable income that you can rely on to live on. Those with substantial savings who wish to retire from a stressful job sooner might also benefit from claiming early.

In contrast, delaying your Social Security claim can be particularly beneficial in certain scenarios. If you are approaching retirement with limited savings, a higher Social Security benefit can provide essential financial support. For example, if you can only withdraw $400 to $500 per month from your IRA or 401(k), an extra $1,000 per month from Social Security can make a significant difference in covering your expenses. Furthermore, if you are in good health, delaying your claim can result in a higher lifetime payout, reducing the risk of depleting your savings as you age.

It is also important to note that delaying Social Security benefits until age 70 will not uniformly increase your monthly payments by $1,033. The actual increase depends on your individual wage history and the benefits you are entitled to. However, the potential financial advantages of delaying your claim if you can are substantial, especially if you anticipate relying on Social Security during retirement.

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