The Most Important Social Security Table You'll Ever See

An annuity is a wonderful thing to receive throughout your retirement. Here's how it works when you buy a simple, fixed annuity: You pay a hefty sum, typically to an insurance company, and in return, it promises to pay you a certain sum for a certain number of years -- or even for the rest of your life.

If you're thinking that you'd love to receive annuity income in retirement, but you don't think you can afford it, guess what -- your Social Security income is essentially annuity income! It will pay you for as long as you live and it even includes cost-of-living adjustments (COLAs) to help you keep up with inflation over time. (If you're buying an annuity, you'd likely have to pay extra for inflation adjustments!)

The bigger your benefits are, the bigger your COLAs will be, so it's worth trying to maximize your Social Security benefits. The most important Social Security table you'll ever see can help with that below.

Image source: Getty Images.

A fairly important Social Security table

First, though, check out the table below, which is fairly important. It shows you what your full retirement age is -- the age at which you're eligible to start receiving the full benefits to which you're entitled, based on your earnings history. You'll soon see why it's important to know this age.

Data source: Social Security Administration. 

The most important Social Security table

Per the table above, if you were born in, say, 1980, your full retirement age is 67. That's the age at which you can start collecting your full retirement benefits -- 100% of them.

You can, however, start collecting your benefits as soon as age 62. Doing so means your checks will be smaller -- though you'll collect many more of them than if you started later. You can make your checks bigger by delaying when you start collecting them. For each year beyond your full retirement age that you delay, up to age 70, your benefits will grow about 8% bigger.

The table below details how much of your full benefits you'll collect based on your full retirement age and when you start collecting. It's the most important Social Security table because it shows how you can control the size of your checks -- and potentially make them bigger.

Data source: Social Security Administration. 

Sooner or later?

Don't assume that delaying claiming your benefits until age 70 is your best move, though. It is indeed best for many, if not most, people -- but for plenty of people, claiming benefits early makes good sense. Each of us should be thinking through the timing of the decision carefully. It can help to consider your "break-even age" -- the age at which delaying will have been worth it. Here are some other considerations:

• If your health is poor, claiming benefits early might be best -- and vice versa.
• If you stand a good chance of living a longer-than-average life, delaying as long as possible is often best -- and vice versa.
• If you simply need the money (perhaps due to a job loss or health setback), you might have to start benefits rolling in sooner than later, whether you want to or not.
• If you have other retirement accounts, you might be able to tap them more heavily for a few years while you delay claiming Social Security.
• If you're married, you should be coordinating your claiming strategy with your spouse.

So spend some time absorbing the information in that important table above, and let it help you think through your decision about when to claim your benefits. Know, too, that there are some other ways to increase your benefit checks -- such as working longer and/or earning more.