If you want to score the biggest Social Security check possible, you probably know it pays to wait. You can get your first check at 62, although you won’t be eligible for your full benefit until full retirement age (FRA), which is 67 if you were born in 1960 or later.
But if you can hold off until your FRA, it might be worth waiting a little extra time before you start pocketing those Social Security benefits. Here’s exactly what you need to do in order to squeeze an extra 24% out of Social Security.
How to Increase Your Social Security by 24%
To maximize your Social Security benefit, you must earn more money, work for at least 35 years, and delay your benefit as long as possible.
If you take Social Security at 62, your benefit will be about 30% less than if you waited until FRA. But you don’t have to start benefits at your FRA.
In fact, holding beyond FRA is quite profitable. You’ll earn an 8% delayed retirement credit for every year you wait past your FRA. Then, your benefits will cap off at age 70, at which point there’s no reason to wait any longer. If your FRA is 67, delaying until age 70 adds 24% to your benefit.
|Claiming Age||Maximum Social Security benefit in 2022|
Data Source: Social Security Administration
One exception: If you’re taking spousal benefits, you won’t be able to earn delayed retirement credits. You will receive your maximum benefit at FRA.
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What if I have already started Social Security?
Even if you’ve already started Social Security, it’s possible to reverse your decision to earn delayed retirement credits. Once you reach the FRA, you can ask Social Security to suspend your benefits. Your benefits will be suspended for one month after you make the request. When you turn 70, Social Security automatically restarts your payments at a higher amount to reflect the credits you’ve earned.
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Do you really need to wait until you’re 70?
Waiting until age 70 ensures you collect the maximum Social Security benefit. But in many cases it doesn’t make sense.
Your health is always a big consideration. If you have serious medical problems or if your parents died relatively young, it makes sense to start benefits early. Delaying usually makes sense when you have a long life expectancy.
Many seniors cannot wait until 70 to start receiving Social Security benefits. If you can no longer work and withdrawals from your nest egg are not enough to cover your basic expenses, delaying as much as possible is not an option.
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On the flip side, if you have substantial savings in your retirement accounts, you may want to start taking Social Security sooner so you can enjoy your golden years even more.
But if you’re behind on retirement savings and can work, holding on to collect an extra 24% from Social Security is a smart move. Timing your Social Security is a big decision. Your health, cost of living, basic needs and desired lifestyle are all factors you need to consider.
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