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Most workers know they’ll sign up for Social Security benefits eventually, but few people have a good idea of when they’re going to begin claiming. Some sign up right away at 62, because they want to get checks for the longest time possible, but they don’t always realize that doing so can have some unintended consequences.
If you want to get the most money out of the program, you have to understand how your timing affects your checks.
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How your age affects the size of your Social Security checks
The government assigns everyone a full retirement age (FRA) based on their birth year. Here’s a table to help you find yours:
Birth Year
Full Retirement Age (FRA)
1943 to 1954
66
1955
66 and 2 months
1956
66 and 4 months
1957
66 and 6 months
1958
66 and 8 months
1959
66 and 10 months
1960 and later
67
Data source: Social Security Administration.
You must wait until your FRA to sign up for Social Security if you want the full benefit based on your work history, but a lot of people don’t do that.
Many people choose to sign up earlier or even as soon as they become eligible at 62. You’ll get more years of checks by doing this, but the government will reduce the size of your monthly benefit, in some cases significantly.
Someone with a FRA of 67 who signs up for Social Security at 62 gets only 70% of their full benefit per check. That means that if you qualify for the average $1,560 benefit at 67, you’d get only $1,092 per month if you signed up as soon as you became eligible.
Things are a little better for those with an FRA of 66. They get 75% of their full benefit per check if they start at 62, but that’s still a pretty significant cut.
Every month you delay benefits, your checks increase by anywhere from 5/12 of 1% to 2/3 of 1% per month, depending on your age and FRA. Your checks continue to grow until you reach the maximum benefit at 70. This is 124% of the full benefit per check for someone with an FRA of 67 and 132% for someone with an FRA of 66.
For someone with a benefit of $1,560 at their FRA of 67, delaying benefits until 70 would net them monthly checks of $1,934 — about $840 more than they’d get by signing up at the earliest opportunity. But that doesn’t always mean delaying benefits is the best decision.
Choosing the best time to sign up for benefits
Your starting age affects the size of your checks, but it’s your life expectancy that ultimately decides how much you get from the program overall. If you don’t need your Social Security benefits to help you cover your living expenses right away, it’s usually best to sign up at the age you believe will give you the largest lifetime benefit.
For those who don’t expect to live long, signing up early is usually the smarter play. Delaying benefits could leave you with nothing if you die before you sign up. But for those who live into their mid-80s or beyond, delaying Social Security usually results in a larger lifetime benefit.
You obviously can’t know how long you’ll live for sure, so you just have to make your best guess. If you’re generally a healthy person, it’s usually smart to plan for a longer life expectancy.
Once you have that best guess, create a my Social Security account and look at its benefit calculator. This will give you an idea of how much you can expect from Social Security if you sign up at various ages. It uses data from the IRS showing your actual income history to give you personalized estimates, but you can also see how a shift in your income would affect your benefits if you’d like.
Make note of your monthly benefit amount at various starting ages you’re considering. Then multiply each of these by 12 to get your estimated annual benefit. Finally, multiply your annual benefit by the number of years you expect to receive benefits to get your estimated lifetime benefit. So if you claim a benefit of $1,560 per month at your FRA of 67, your estimated annual benefit would be $18,720. If you lived to 87, your estimated lifetime benefit would be $374,400.
Use this process to figure out which starting age would give you the most money. Once you know roughly how much you can expect from Social Security, you can begin to estimate how much you need to save on your own for retirement.
But this isn’t a one-and-done process. Your plans for retirement can change over time, and it’s possible the government will alter Social Security at some point to help make it sustainable for future generations. This could affect when you want to start Social Security. There’s just no way to know yet.
The best thing you can do is review your plans for Social Security every time you review your retirement plan. This should be at least once per year or whenever you experience a major change to your finances. Regular check-ins like these can help you stay on track even if your plans for Social Security change.
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