Few people wait to claim Social Security until age 70. But the wait might be worth it to maximize your benefits.
The difference in monthly benefits between someone claiming as soon as possible at age 62 and someone who waits until 70 is massive. Most retirees can increase their benefits check by up to 77%. And while you'll have to forego the supplementary income in your 60s, it usually works out in the long run.
Here's what the average retiree receives in Social Security benefits at age 70.
Image source: Getty Images.
The three main factors used to determine your Social Security benefits
The government uses just a few inputs to determine how much each American receives in monthly Social Security benefits:
- Your earnings history for your 35 highest-earning years (on an inflation-adjusted basis).
- Your full retirement age.
- The age at which you apply for benefits.
The Social Security Administration maintains a record of how much you earned each year of your working career. If you're curious, you can look it up by registering a free account on the Social Security website. When it comes time to calculate your Social Security benefit, it adjusts every year's earnings for inflation and takes the average of the 35 highest-earning years. It plugs that number into the Social Security benefits formula, determining your primary insurance amount.
Your primary insurance amount is the monthly benefit you'd receive if you claim Social Security the month you reach full retirement age. Your full retirement age is determined by when you were born. Those born in 1954 or earlier have a full retirement age of 66. Your full retirement age increases by two months for every year you were born after 1954 until maxing out at age 67 for those born in 1960 or later.
Claiming benefits before your full retirement age results in a reduction in monthly benefits relative to your primary insurance amount. Waiting to claim benefits until after your full retirement age will result in a bigger monthly check. Here's how claiming age can affect the monthly benefit for someone with a full retirement age of 67.
| Claiming Age | Benefit as a Percentage of Primary Insurance Amount |
|---|---|
| 62 | 70% |
| 63 | 75% |
| 64 | 80% |
| 65 | 86.67% |
| 66 | 93.33% |
| 67 | 100% |
| 68 | 108% |
| 69 | 116% |
| 70 and up | 124% |
Data source: Social Security Administration. Calculations by author.
Your monthly check will increase every month you delay taking your benefits. The above table shows how much you'll receive if you claim benefits the same month as your birthday.
Here's the average benefit at age 70
If your goal is to get the largest Social Security check possible, you'll need to wait until age 70, as the table above shows. Your benefit stops increasing once you reach that age, so it rarely makes sense to delay any longer.
The average reward for waiting until age 70 is quite substantial, and it shows up in the data. The average 70-year-old collecting Social Security received $1,963.48 in December 2022, according to the most recent data provided by the Social Security Administration. In comparison, the average 62-year-old received just $1,274.87 that month.
But that gap hardly reflects the true benefit of waiting until 70 to claim Social Security. That group of 70-year-old retirees includes everyone who was collecting Social Security that month, regardless of whether they waited to claim their benefits that year, claimed at age 62, or somewhere in between.
The 309,000 retirees who waited until age 70 or later to apply for Social Security benefits in 2022 received an average of $3,027.00 per month. In comparison, the new 62-year-old Social Security applicants received an average benefit of just $1,287.61. Put another way, those who waited until age 70 received 135% more from Social Security each month that year.
Image source: Getty Images.
It's important to note that the 135% gap between those who claimed Social Security at age 70 versus those who claimed at age 62 is wider than the formula math implies. As the chart above shows, you can only increase your own monthly benefits check from 70% of your primary insurance amount to 124% of your primary insurance amount. That's just a 77% increase.
There are a couple of things going on here.
First, 70-year-olds applying for Social Security in 2022 had a full retirement age of 66. That gives them an extra year of delayed retirement credits, pushing their benefit to 132% of their primary insurance amount. Still, that only results in an 88.5% increase relative to the decreased benefit for those claiming at age 62 in 2022.
The bigger factor is that the primary insurance amount of someone claiming at age 62 is, on average, lower than the primary insurance amount of someone who's able to wait until 70. There are a variety of reasons why that might be the case. A person may have had a low-paying career that didn't allow them to save as much for retirement, necessitating supplementary income earlier in retirement. Similarly, their career may have been cut short due to health issues, so they couldn't save as much as they planned. There's nothing wrong with tapping Social Security early in those circumstances.
However, if you're able to wait until age 70, it likely makes sense for you to do so. Even though you'll have to give up eight years of checks from the government, you'll end up better off in the long run more often than not. Multiple sources agree the odds typically favor waiting to collect benefits to maximize your lifetime Social Security income.
While every individual case is different, waiting until 70 to claim your retirement benefits can result in substantially more wealth to spend in your golden years.
