Many retirees rely on Social Security in their later years. Since these benefits are designed to replace only about 40% of pre-retirement income, the amount you receive isn't always high. You can, however, find ways to increase it.

One of the easiest and most effective ways to boost your Social Security benefit is by waiting to claim it as long as possible. While you could start getting checks at 62, this would reduce the amount you get. If you wait until age 70, on the other hand, you max out your monthly income.

Unfortunately, after 2020, new retirees won't be able to grow their incomes as much by waiting as they could this year and in prior years. Here's why. 

Older couple using calculator and looking at financial documents.

Image source: Getty Images.

The Social Security full retirement age is changing (again)

To understand why new retirees won't be able to increase their checks as much next year, it's important to understand what Social Security's full retirement age (FRA) is and how it affects the benefits you receive.

FRA is the age at which you can claim Social Security and get your standard benefit, or primary insurance amount (PIA). Your PIA is based on average earnings over your career. It'll be reduced for each month you claim benefits prior to FRA, or increased if you earn delayed retirement credits by waiting to claim until after FRA.

Everything centers around full retirement age, though -- and FRA is based on your birth year. For people born between 1943 and 1954, FRA was 66. However, for anyone born after 1954, FRA gradually increases. It goes up by two months for each subsequent birth year until it hits 67 for people born in 1960 or later. 

Since 2020 is the last year in which people born in the 1943 to 1954 range could turn 66, it's the last year before retirees will have a later FRA. If you were born in 1955 and turn 66 next year in 2021, your FRA will be 66 and two months instead of 66. 

So if you retired in 2021 right after hitting your 66th birthday, you'd actually face an early filing reduction for two months. Reductions are 5/9 of 1% for each of the first 36 months you're early, and an additional 5/12 of 1% if you claim before then. You'd be subject to about a 1.111% reduction in your standard benefit if you retired right at 66. If, on the other hand, you wanted to max out your benefits by waiting until 70, you'd have fewer months in which it's possible to earn delayed retirement credits.

A retiree with an FRA of 66 could earn a full 48 months of delayed retirement credits, which increase your PIA by 2/3 of 1% per month. But if your FRA is 66 and two months, you'd get delayed retirement credits for a maximum of 46 months. Instead of the maximum 32% boost if you had an FRA of 66 and waited to 70, the most you could increase your benefits by if you wait until 70 is about 30.667%.

And things only get worse for those born later as the table below shows. 

If You Were Born in:

Your FRA Is:

And the Maximum Delayed Retirement Credits You Could Earn Are:





66 and 2 months



66 and 4 months



66 and 6 months



66 and 8 months



66 and 10 months





The change to FRA makes a huge difference in how much you can increase your income, especially for later-borne retirees who can earn a maximum of 36 retirement credits. The most they'll be able to increase their PIA by waiting is 24%, while retirees born just six years earlier could get up to a 32% raise.  

Make sure you understand how Social Security works

As you can see, Social Security rules are kind of confusing. But it's important to understand how this benefit program works so you can claim at the age that's right for you.

Our guide to how Social Security benefits are determined can help you learn more about full retirement age and other factors that affect the amount you'll receive as a retiree.