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The Most Important Social Security Chart You'll Ever See

By Selena Maranjian - Nov 19, 2018 at 5:03AM

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This simple chart can help you make smart decisions and get the most out of Social Security.

Odds are, you know that it's important to know more about Social Security because it will be vital to your financial comfort in retirement. But you may not have much interest in reading lots of books about it. Instead, you might want to focus on just what you need to know.

This article can help because it offers the most important Social Security chart, which shows the benefits of delaying starting to collect benefits and the impact on your checks if you start collecting early.

Two hands holding up a sign that says "Did You KNOW?"

Image source: Getty Images.

Social Security basics

Before we get to the most important chart, though, let's review some basics about Social Security. For starters, the normal (or "full") retirement age for Social Security -- the age at which you're eligible to start collecting your full benefits -- is 65 for those born in 1937 or earlier, 67 for those born in 1960 or later, and somewhere in between for those born between 1937 and 1960.

Your full retirement age isn't when you have to start collecting your benefits. You actually can start receiving benefits as early as age 62 and as late as age 70. Here's the catch: For every year beyond your full retirement age that you delay starting to receive benefits, you'll increase their value by about 8% -- until age 70. So delaying from age 67 to 70 can leave you with checks about 24% fatter. And if you start collecting early, your benefits can be up to about 30% smaller.

That makes it seem like a no-brainer to delay for the biggest possible checks. But that's not necessarily your best move because the system is designed so that, for those with average life spans, total benefits received are about the same no matter when you start collecting. Yes, checks that start arriving at age 62 will be considerably smaller, but you'll receive many more of them. Thus, it's not necessarily dumb to start collecting early, and the age at which most retirees start collecting was recently 62.

The most important Social Security chart

Here, then, is the most important Social Security chart that you need to take in:

Start Collecting at:

Full Retirement Age of 66 

Full Retirement Age of 67 




























Source: Social Security Administration. 

The above chart shows the approximate percentage of your full benefits that you'll get if you start collecting at various ages and offers you a rough idea of the effect of waiting to start collecting benefits or starting early. As an example, if your full retirement age is 67 and you start collecting benefits at age 63, your checks will be 75% as big as they would have been had you waited until age 67 -- i.e., you would receive 75% of your full benefits. Meanwhile, if you waited until age 70, your checks would be 124% of what they would have been.

Remember that between age 63 and age 70 there are seven years that are made up of 84 months. That's 84 checks that you'll miss out on if you wait until age 70. That's why it can be a wash if you live a life of roughly average length.

The words "Will Your Social Security Be Enough" printed on a torn piece of paper, next to two red dice.

Image source: Getty Images.

Social Security benefits: How much will you receive?

Now that you know all about the percentages of your benefits that you'll receive, you need to apply them to some actual benefits. How much will you receive from Social Security? Well, the answer is different for each of us, as it's based on your earnings history, but here's a little context: The average Social Security retirement benefit was recently $1,417 per month, or about $17,000 per year. The maximum benefit for those retiring at their full retirement age in 2018 (that's 66 or 67 for most of us) was recently $2,788 per month -- or about $33,500 for the whole year. For those who wait until age 70 to start collecting benefits, the maximum is $3,698, or about $44,400. These maximums go to those who earned a lot more than average in their working lives.

You can find out what you can expect to receive from Social Security by setting up a my Social Security account with the Social Security Administration (SSA). Doing so will not only let you see estimates of your future benefits based on records of your earnings in past years, but you also can take care of other business. For example, you can change your address, review the SSA's record of your past earnings to make sure they're correct, check the status of your application for benefits, request a replacement Social Security card (if you meet certain criteria), request a replacement Medicare card, start or change the direct deposit of your benefit payments, and get a replacement SSA-1099 or SSA-1042S form for tax purposes -- among other things.

An extra benefit of setting up an account is that you can foil any identity thieves who may have hoped to set up an account for you in order to claim your benefits and cause a lot of headaches. (That's an increasingly prevalent scam.)

Hands writing the words more income on an index card.

Image source: Getty Images.

Increase your Social Security benefits

If you aren't thrilled with the estimate of your future benefits, there are ways to increase them. These include:

  • Examine the SSA's record of your income and taxes paid into the Social Security system to make sure it's correct. If it's not, you might end up receiving smaller benefit checks than you've actually earned. Simply correcting an error might increase your benefits.
  • Work at least 35 years. The formula used to compute your benefits is based on your earnings in the 35 years in which you earned the most money (adjusted for inflation). If you only earned income during 28 years, the formula will be incorporating seven zeros, which is not ideal.
  • Aim to have as many high-earning years as possible. If you're currently earning much more than in the past (on an inflation-adjusted basis), you might consider working for another year or two -- even if you've already worked 35 years -- as each high-earning year will kick out a low-earning year, boosting your benefits.
  • Delay your divorce. This benefit-increasing strategy only will apply to a small subset of people, but you may be among them. If you're divorcing after, say, nine years of marriage, consider staying married until 10 years have passed -- if you can. A divorced person may be able to claim benefits based on their ex-spouse's earnings -- even if that ex has remarried -- if they were married for at least 10 years. There are a few more rules related to this, so look into them if this might apply to you.
  • Coordinate a strategy with your spouse if you're married. For example, a couple might start collecting the benefits of the spouse with the lower lifetime earnings record on time or early, while delaying starting to collect the benefits of the higher-earning spouse. That way, the couple gets some income earlier, and when the higher earner hits 70, he or she can collect extra-large checks. Also, should that higher-earning spouse die first, the spouse with the smaller earnings history can collect those bigger benefit checks.

Social Security has become the biggest source of income for most older Americans -- about 48% of married elderly Social Security beneficiaries and 69% of unmarried ones get 50% or more of their income from Social Security. The fact that it's so vital to most of us means it's really worth learning more about, so you can make smart decisions and maximize the money you ultimately get from the program.

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