Not many people know that Social Security gives retirees “do-over” and “suspension” choices that can help them get bigger benefits. When you decide to start getting Social Security payments has a big effect on how much you get.
For example, if a person who made average wages during their working life files for Social Security at age 62 this year, their payments will replace about 30% of the money they made before they retired. What if that person waits until they are 70 years old to start getting benefits? Their checks will be more than half of what they were making before they retired.
The Impact of Claiming Age on Your Social Security Benefits
Even though the benefits for waiting are much higher, about 25% of qualified U.S. workers still claim Social Security at age 62. A lot of people choose to start getting benefits a long time before they turn 70. When you claim early, you agree to get a smaller monthly benefit in exchange for getting more checks over time. However, many people later rue this choice.
Luckily, Social Security lets you change your mind about your benefits and maybe even get more of them after you’ve started getting them. Here are two important plans:
- Do-Over Option: This allows you to withdraw your application for Social Security benefits within 12 months of first claiming them. You must repay all the benefits you received, but this can be a valuable reset button if your financial situation changes.
- Suspension Option: If you’ve reached your full retirement age but are not yet 70, you can suspend your benefits. This will stop payments and allow your benefits to grow until you resume them, potentially at a higher monthly rate.
Knowing about and taking advantage of these choices can make a big difference in how much your Social Security payments are worth in the long run. When you file your claim is very important, and you should know about the options for a do-over or delay if your situation changes.
You can better match your Social Security benefits with your retirement goals and cash needs by using these less well-known tips. So, before you make a choice, take the time to look into all of your options. Then, make a choice that will help you the most.
Don’t forget that the goal is to have a stable and comfortable retirement, and using these Social Security tactics can be a big part of getting there.
There are two little-known rules about Social Security that can sometimes help people who filed early change their minds. This gives them the chance to dramatically raise their monthly benefits by as much as 77%.
How Claiming Age Impacts Social Security Benefits
When someone claims Social Security benefits based on their own work experience, their benefits are based on two main things: their lifetime income and the age at which they claim.
1. Lifetime Income
First, your Primary Insurance Amount (PIA) is based on your pay from the 35 years when you made the most money, adjusted for inflation. If you started getting Social Security at your Full Retirement Age (FRA), this is how much you would get each month. The FRA is 67 for people born after 1960.
2. Claiming Age
Second, the PIA changes depending on whether you leave early or later:
- Early Retirement: If you claim Social Security before reaching your FRA, your monthly benefit will be reduced.
- Delayed Retirement: If you claim Social Security after reaching your FRA, your monthly benefit will increase.
If you know these rules and how they affect your benefits, you can make smarter choices about when to claim Social Security, which could lead to a big increase in your monthly income.
If you want to make the most of your retirement income, you need to know when to claim Social Security payments. You should think about these two important qualifications:
Qualifications for Claiming Social Security Benefits
First, you can start getting retirement benefits when you turn 62. In other words, you can’t start getting Social Security before this age. Second, once you turn 70, you can no longer get delayed retirement points. So, there is no cash benefit to waiting to file your claim after this age.
Benefits Based on Claiming Age
The chart below shows how much of your Primary Insurance Amount (PIA) you will get based on your birth year and the age you choose to claim your benefits:
Birth Year: 1943-1954
- % of PIA When Claiming Benefits at 62:
- % of PIA When Claiming Benefits at 63:
- % of PIA When Claiming Benefits at 64:
- % of PIA When Claiming Benefits at 65:
- % of PIA When Claiming Benefits at 66:
- % of PIA When Claiming Benefits at 67:
- % of PIA When Claiming Benefits at 68:
- % of PIA When Claiming Benefits at 69:
- % of PIA When Claiming Benefits at 70:
By knowing these important facts, you can make a smart choice about when to start getting Social Security payments, which will help you get the most money in retirement.
To plan for a good retirement, you need to know how your Social Security payments change depending on when you start collecting them. To help you understand better, let’s break these numbers down.
Social Security Benefits by Birth Year
Born in 1955
- 62 years old: 74.2%
- 63 years old: 79.2%
- 64 years old: 85.6%
- 65 years old: 92.2%
- 66 years old: 98.9%
- 67 years old: 106.7%
- 68 years old: 114.7%
- 69 years old: 122.7%
- 70 years old: 130.7%
Born in 1956
- 62 years old: 73.3%
- 63 years old: 78.3%
- 64 years old: 84.4%
- 65 years old: 91.1%
- 66 years old: 97.8%
- 67 years old: 105.3%
- 68 years old: 113.3%
- 69 years old: 121.3%
- 70 years old: 129.3%
Born in 1957
- 62 years old: 72.5%
- 63 years old: 77.5%
- 64 years old: 83.3%
- 65 years old: 90%
- 66 years old: 96.7%
- 67 years old: 104%
- 68 years old: 112%
- 69 years old: 120%
- 70 years old: 128%
Born in 1958
- 62 years old: 71.7%
- 63 years old: 76.7%
- 64 years old: 82.2%
- 65 years old: 88.9%
- 66 years old: 95.6%
- 67 years old: 102.7%
- 68 years old: 110.7%
- 69 years old: 118.7%
- 70 years old: 126.7%
Born in 1959
- 62 years old: 70.8%
- 63 years old: 75.8%
- 64 years old: 81.1%
- 65 years old: 87.8%
- 66 years old: 94.4%
- 67 years old: 101.3%
- 68 years old: 109.3%
- 69 years old: 117.3%
- 70 years old: 125.3%
Born in 1960 or later
- 62 years old: 70%
- 63 years old: 75%
- 64 years old: 80%
- 65 years old: 86.7%
- 66 years old: 93.3%
- 67 years old: 100%
- 68 years old: 108%
- 69 years old: 116%
- 70 years old: 124%
Also See:- When will you get your first September Social Security check, and who will be affected?