Age 70: The Optimal Payout Milestone
While you can begin claiming Social Security as early as age 62, your benefits increase each year you delay claiming past your Full Retirement Age (FRA) up to a maximum at age 70. This increase, known as Delayed Retirement Credits (DRCs), is about 8% per year for those born in 1943 or later and stops accumulating at age 70. Delaying until age 70 can significantly increase your monthly income for life and potentially increase the survivor benefit for your spouse.
Full Retirement Age and the Delayed Credit System
Your FRA, based on your birth year, is typically between ages 66 and 67. Claiming before your FRA results in a permanent reduction, while claiming at FRA gives you 100% of your Primary Insurance Amount (PIA). Claiming between FRA and 70 earns DRCs, increasing your benefit above your PIA.
For example, delaying from age 67 (FRA) to 70 could increase your monthly benefit by 24%.
Benefit Comparison by Claiming Age
The table below provides a simplified hypothetical comparison based on a $2,000 monthly benefit at FRA (age 67), using figures consistent with sources like Bankrate and the SSA:
| Claiming Age | Monthly Benefit (Hypothetical) | Impact on Benefit |
|---|---|---|
| 62 | ~$1,400 | 30% permanent reduction |
| 67 (FRA) | ~$2,000 | 100% of full benefit |
| 70 | ~$2,480 | 24% increase over FRA benefit |
This shows the potential difference in income based on claiming age.
The Importance of Claiming at 70
There is no financial benefit to delaying past age 70, as DRCs stop accumulating at this age. The Social Security Administration recommends applying promptly if you are age 70 or older and haven't claimed to avoid missing out on benefits at their maximum level.
- No Further Credit: Benefits do not increase after age 70.
- Missing Payments: Delaying past 70 means forfeiting maximum monthly payments.
- Auto-Restart: Benefits automatically restart at age 70 if you voluntarily suspended them after reaching your FRA.
Longevity and the Break-Even Point
Delaying until 70 maximizes your monthly check, but the break-even point is typically in your late 70s or early 80s. Longer life expectancy favors delaying, while a shorter one might favor claiming earlier.
Factors Influencing Your Decision
Choosing when to claim is a personal decision based on several factors:
- Current Financial Needs: Do you need the income now?
- Other Income Sources: How do other retirement funds factor in?
- Spousal and Survivor Benefits: How does your decision impact your spouse?
- Working Status: Are you still employed?
- Medicare Enrollment: Enroll in Medicare at age 65 regardless of Social Security claiming age. Find more information on the official Social Security website: ssa.gov.
Conclusion
Age 70 is the maximum age to increase your monthly Social Security benefit through delayed retirement credits. While delaying maximizes your monthly payout and potential survivor benefits, the optimal claiming age is a personal decision.
