Some readers may already know that to maximize their monthly Social Security benefits check, they need to wait until age 70. That can be a long wait for many retirees, but if you can hold out, it's often worth it.
While you can claim Social Security starting at age 62, retirees who wait until age 70 typically end up maximizing their benefits throughout their retirement. That's thanks in no small part to those bigger monthly checks.
The increase in Social Security benefits for the average retiree who waits until age 70 is quite substantial. To understand why, you need to know the factors determining your monthly benefit and what the average retiree receives for delaying until age 70.
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The factors impacting your monthly Social Security benefit
Only three factors impact your monthly Social Security benefit:
- Earnings history
- Full retirement age
- Claiming age
By far the biggest factor impacting your Social Security benefits is your earnings history. The Social Security Administration averages your 35 highest-earning years (adjusted for inflation) as the main input in determining your primary insurance amount, or PIA. Your PIA is the amount you receive if you claim Social Security at your full retirement age. The more you earn during your career (up to a point), the more you'll receive in benefits.
Your full retirement age is determined based on the year you were born. Those born in 1954 or earlier reached full retirement age at 66. The full retirement age then increases by 2 months for each year after 1954 until reaching 67 years old for those born in 1960 or later.
When you claim Social Security relative to your full retirement age also impacts your monthly check. While you can claim starting at age 62, you'll see a reduced benefit. If you delay beyond your full retirement age, though, you'll see an increased benefit. The Social Security Administration adds 8% to your PIA each year you delay benefits beyond your full retirement age.
The table below details the percentage of their PIA a retiree will receive based on the year they were born and their claiming age.
| Birth Year | 62 | 63 | 64 | 65 | 66 | 67 | 68 | 69 | 70 |
|---|---|---|---|---|---|---|---|---|---|
| 1943-1954 | 75.0% | 80.0% | 86.7% | 93.3% | 100.0% | 108.0% | 116.0% | 124.0% | 132.0% |
| 1955 | 74.2% | 79.2% | 85.6% | 92.2% | 98.9% | 106.7% | 114.7% | 122.7% | 130.7% |
| 1956 | 73.3% | 78.3% | 84.4% | 91.1% | 97.8% | 105.3% | 113.3% | 121.3% | 129.3% |
| 1957 | 72.5% | 77.5% | 83.3% | 90.0% | 96.7% | 104.0% | 112.0% | 120.0% | 128.0% |
| 1958 | 71.7% | 76.7% | 82.22% | 88.9% | 95.6% | 102.7% | 110.7% | 118.7% | 126.7% |
| 1959 | 70.8% | 75.8% | 81.1% | 87.8% | 94.4% | 101.3% | 109.3% | 117.3% | 125.3% |
| 1960 or later | 70.0% | 75.0% | 80.0% | 86.7% | 93.3% | 100.0% | 108.0% | 116.0% | 124.0% |
Data source: Social Security Administration.
What's the average increase in Social Security benefits for those waiting until age 70?
As you can see, those waiting until age 70 get a significant boost in their Social Security benefits relative to their PIA. Retirees who can claim at age 70 by 2024 receive a 32% increase over their PIA -- that's nothing to sneeze at.
In fact, new Social Security benefits awarded to retirees age 70 and older in 2022 (the most recent data available) averaged $3,065.48. That means the average increase in benefits over their full retirement age was an extra $743.15 per month or $8,918 per year.
It's important to note that retirees in a position to delay until age 70 are often higher earners. They either earned good wages and built enough savings to support themselves through their 60s, or they delayed retirement. As a result, their average PIA is higher than retirees who need to claim their benefits early, such as at age 62.
That said, the difference in the PIA for those waiting until 70 and those who waited until their full retirement age isn't very significant. As such, it seems like those in a position to wait until full retirement age to claim Social Security would do well to further delay until 70, all else being equal.
While everyone's situation is different, delaying benefits can provide thousands of extra dollars for your retirement budget, and it's statistically most likely to help you maximize your savings in retirement.
