Delaying Social Security Benefits Could Boost Monthly Payments by Over $1,000-But Is It Right for You?

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

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Image Source: Stefon Walters via Getty Images

As millions of Americans approach retirement, one critical decision looms: when to begin claiming Social Security. While the amount you earn throughout your career is the foundation of your benefits, the age at which you claim them may be just as important and far more within your control.

Delaying Social Security benefits past your full retirement age (FRA) can significantly increase your monthly payments. According to the Social Security Administration, benefits rise by approximately 8% for every year you delay claiming beyond FRA, up until age 70. For many retirees, this can result in an increase of $1,000 or more in monthly income.

The Power of Patience

Consider this: If your full monthly benefit known as your primary insurance amount (PIA)  is $2,000 at an FRA of 67, claiming early at 62 would reduce your benefit to about $1,400. However, delaying until age 70 would increase it to $2,480, a $1,080 difference each month.

For higher earners with a PIA of $3,000, the contrast is even more striking:

• At 62: $2,100/month

• At 70: $3,720/month

• Difference: $1,620/month

Even partial delays can have substantial effects. Someone with a $3,000 PIA would receive $3,480 at age 69 and $2,250 at 63 a monthly difference of $1,230.

You can estimate your benefits at different claiming ages using your Social Security Administration online account.

Timing Isn't Everything

Despite the clear financial upside, delaying benefits isn't always the best decision. For retirees who rely on Social Security to meet immediate needs or those in poor health, waiting may not be realistic or wise. In such cases, the priority should be financial stability.

Another important factor is your break-even age the age at which the total lifetime benefits from delaying equal those from claiming early. In the earlier example, the break-even point between claiming at 62 and at 70 is around 80 years and 5 months. Only after that point would delaying benefits result in a higher total payout over time.

Weighing the Pros and Cons

Maximizing benefits by delaying can be a powerful strategy, particularly for those in good health with other sources of retirement income. But it requires a personalized approach. Factors like longevity, health, retirement savings, and lifestyle goals all play a role in determining the best time to claim.

Social Security is more than just a monthly check it’s a key component of your retirement plan. Knowing when to claim is one of the most important financial decisions you'll make. Consider consulting a financial advisor and use all the tools at your disposal including your SSA account to make an informed choice tailored to your needs.