Understanding the Full Retirement Age
To figure out when your Social Security benefits increase, you first need to know your full retirement age (FRA). This is the age at which you are entitled to receive 100% of your primary insurance amount (PIA), the benefit calculated from your lifetime earnings. Your FRA is determined by the year you were born.
Full Retirement Age by Birth Year
If you were born in 1954 or earlier, your FRA was 66. For those born between 1955 and 1959, your FRA increases by a few months each year. Anyone born in 1960 or later has a full retirement age of 67.
- Born in 1943–1954: FRA is 66.
- Born in 1955: FRA is 66 and 2 months.
- Born in 1956: FRA is 66 and 4 months.
- Born in 1957: FRA is 66 and 6 months.
- Born in 1958: FRA is 66 and 8 months.
- Born in 1959: FRA is 66 and 10 months.
- Born in 1960 or later: FRA is 67.
Delayed Retirement Credits: The Secret to Boosting Your Benefits
Your benefits start to increase each month you delay claiming past your FRA, and this increase continues until you reach age 70. These boosts, known as Delayed Retirement Credits (DRCs), are added to your monthly benefit amount and result in a permanently higher payment for the rest of your life.
How delayed retirement credits work
For those born in 1943 or later, the annual rate of increase is 8%, or two-thirds of 1% for each month you delay. For example, if your FRA is 67 and you delay until age 70, you would receive an additional 24% (3 years x 8%) on top of your full retirement benefit.
A simple example
Imagine your full retirement benefit is $2,000 per month. If your FRA is 67, and you wait until age 70 to claim, your monthly benefit would increase to $2,480—a 24% increase for life. This does not include any cost-of-living adjustments (COLA) that would also be applied annually, further increasing your benefit.
Comparing Claiming Ages: Early vs. Full vs. Delayed
Choosing when to claim is a crucial decision that can significantly impact your financial well-being throughout retirement. Here is a comparison of claiming at different ages for someone with an FRA of 67, based on a hypothetical benefit amount of $2,000 at FRA.
| Claiming Age | Benefit Payout | Lifetime Reduction/Increase | How it works |
|---|---|---|---|
| 62 (Earliest) | 70% of FRA benefit | -30% Reduction (Permanent) | Your benefit is permanently reduced because you claim it 60 months early. |
| 67 (Full Retirement) | 100% of FRA benefit | 0% (No change) | You receive your full, unreduced benefit as calculated from your lifetime earnings. |
| 70 (Maximum Benefit) | 124% of FRA benefit | +24% Increase (Permanent) | You earn Delayed Retirement Credits (8% per year) from age 67 to 70. |
The Age 70 Maximum
While delaying benefits past your FRA increases your monthly payment, this process stops at age 70. There is no further increase to your Social Security benefit after this age, regardless of how much longer you wait to claim. To maximize your monthly income, it is essential to claim your benefits at age 70 if you have delayed past your FRA. Waiting beyond this point means you are leaving money on the table.
Other Factors That Can Increase Your Benefit
Beyond delayed retirement credits, other actions can increase your monthly Social Security check:
- Working for at least 35 years: Your benefit is calculated based on your 35 highest-earning years. If you work fewer than 35 years, zero-earning years are factored into the calculation, lowering your average.
- Having a higher lifetime income: If you continue working and earning a higher income later in your career, those higher-earning years will replace lower-earning years in your 35-year average, increasing your benefit.
- Collecting spousal benefits: In some cases, a spousal benefit can provide a higher payment than an individual's own benefit. This is often the case if one spouse had significantly lower lifetime earnings. You can learn more about spousal benefits on the official Social Security Administration website: Social Security Spousal Benefits.
The Cost-of-Living Adjustment (COLA)
In addition to delayed retirement credits, your Social Security benefit is also adjusted annually for inflation through the Cost-of-Living Adjustment (COLA). A higher base benefit, achieved by delaying your claim, means that every COLA increase will be larger in dollar terms, further boosting your monthly payments over time.
How to Choose the Right Age for You
Deciding when to start claiming Social Security is a personal choice based on your financial situation, health, and life expectancy. If you are in good health and have a long life expectancy, waiting until age 70 is often the best strategy to maximize your total lifetime benefits. However, if you have health issues or need the income sooner, claiming earlier may be the right decision for you.
Conclusion: Your Decision, Your Outcome
Knowing when your Social Security benefits increase is critical for smart financial planning. While you can claim as early as age 62, waiting until your full retirement age provides your standard benefit, and delaying until age 70 offers the maximum possible monthly payment due to delayed retirement credits. By understanding these options and weighing your personal circumstances, you can make an informed decision that secures a more stable financial future.
