Delaying Your Claim: The Single Most Powerful Strategy
For most people, the most effective way to significantly increase lifetime Social Security benefits is to wait to claim them. While you can begin collecting as early as age 62, this comes with a permanent reduction of up to 30%. Conversely, for each year you delay claiming past your Full Retirement Age (FRA)—which is between 66 and 67 for most—you earn an 8% increase in your annual benefit. This continues until age 70, at which point no further delayed retirement credits are awarded.
For example, a person with an FRA of 67 who delays until 70 secures a monthly benefit that is 24% higher than their FRA benefit, plus any annual Cost-of-Living Adjustments (COLAs). Over a long retirement, that translates to tens or even hundreds of thousands of extra dollars in income, especially when the larger base benefit is compounded by future COLAs. To achieve a six-figure boost, you must have the means to cover living expenses during the delay period, often referred to as a “bridge strategy” using retirement savings.
Maximizing Your Earning Record
Your Social Security benefit is based on your highest 35 years of earnings, adjusted for inflation. If you haven't worked for a full 35 years, or if your early-career earnings were low, continuing to work can have a profound impact. An extra year of high earnings can replace an older, lower-earning year in the calculation, automatically increasing your benefit.
The Impact of Working Longer
- Higher Lifetime Average: If you have years with zero earnings in your top 35, replacing them with any earnings, even from a part-time job, can raise your average and your benefit amount.
- Replacment of Low-Earning Years: For those with a full 35-year work history, a new high-earning year can push a low-earning year out of the calculation, leading to a permanent boost.
- Earnings Test Recalculation: For those who work while collecting benefits before their FRA, the Social Security Administration (SSA) temporarily withholds some benefits. However, those withheld benefits are not lost forever. At your FRA, the SSA recalculates your benefit to account for the months where payments were withheld, resulting in a higher monthly check for the rest of your life.
Coordinating Spousal and Survivor Benefits
Married and divorced couples have additional strategic options to maximize their benefits. A well-planned approach can secure a higher total payout for the household and ensure the surviving spouse receives the maximum possible income.
Strategic Considerations for Couples:
- Higher-earner delays: The highest-earning spouse should aim to delay claiming until age 70. This not only maximizes their own benefit but also provides the largest possible survivor benefit for the lower-earning spouse. The surviving spouse will receive the higher of the two benefits for the remainder of their life.
- Lower-earner claims early or at FRA: The lower-earning spouse can claim their own benefit earlier, providing some household income while the higher earner's benefit grows. This can be a strategic way to bridge the gap and avoid tapping into other retirement savings too early.
- Divorced spousal benefits: If you were married for at least 10 years and are currently unmarried, you may be eligible to claim benefits based on your ex-spouse's work record. Your ex-spouse does not need to have started collecting benefits for you to do so, and your claim will not affect their benefit amount.
Comparison of Claiming Scenarios
| Feature | Claiming at Age 62 (Early) | Claiming at Full Retirement Age (FRA) | Claiming at Age 70 (Maximum Delay) |
|---|---|---|---|
| Monthly Benefit | Permanently reduced by up to 30%. | Receives 100% of Primary Insurance Amount (PIA). | Receives up to 124% of PIA (for those born in 1960 or later). |
| Lifetime Potential | Lower total lifetime benefits if you live past your break-even point. | Offers a balanced approach, but misses out on potential growth. | Potential for the highest total lifetime benefits, especially for longer life expectancies. |
| Impact on Survivors | The survivor benefit will be based on a smaller base amount. | Provides a standard survivor benefit based on 100% of the earner's PIA. | Provides the maximum possible survivor benefit, offering more security for the surviving spouse. |
| Flexibility | Provides immediate access to income, but at a permanent cost. | Allows for standard benefits, but closes the door on further growth. | Requires using other retirement savings to bridge the income gap, but results in a larger permanent benefit. |
| Key Consideration | Ideal for those with shorter life expectancies or immediate financial need. | A solid, baseline option for those who cannot wait longer. | The best option for maximizing lifetime benefits and for couples prioritizing survivor benefits. |
Conclusion
To boost your Social Security in retirement by at least $100,000, the path forward involves deliberate planning and strategic timing. While delaying your benefits until age 70 is the most impactful single decision, it should be combined with other strategies to build on that foundation. Maximizing your earnings record, coordinating claims with a spouse, and considering all available options for survivor or divorced-spouse benefits can help secure your financial future. The key is to assess your personal circumstances, including health and financial resources, and make informed choices that work for your unique retirement goals. Starting the planning process early is essential to unlocking the full potential of your Social Security benefits.
Official Social Security Administration Website
Actionable Steps
- Delay Your Claim to Age 70: Unless your health or financial situation dictates otherwise, waiting until age 70 is the single best way to maximize your own lifetime benefit and protect your spouse.
- Continue Working Longer: If your highest 35 years of earnings include low-wage or zero-earning years, working an extra year or two can increase your average earnings and your benefit.
- Coordinate with a Spouse: If you are married, strategize together. The higher earner delaying their claim provides the maximum survivor benefit. The lower earner can claim early to provide some income.
- Check for Divorced Spousal Benefits: If you were married for at least 10 years, you may be eligible for a benefit based on your ex-spouse's earnings record. This is a crucial, and often overlooked, opportunity.
- Create a 'Bridge' Strategy: Plan to use other retirement savings, like a 401(k) or IRA, to cover living expenses during the years you delay your Social Security claim.
