This has been a special year for Social Security beneficiaries. For the first time in the program's storied history, the average monthly retired-worker benefit surpassed $2,000. What's more, 2026 will mark the fifth consecutive year that Social Security's annual cost-of-living adjustment (COLA) has hit at least 2.5%. This was last achieved nearly three decades ago.
These achievements matter because most retirees rely on their Social Security income, in some capacity, to cover their expenses. Nearly a quarter-century of annual surveys from Gallup have shown that 80% to 90% of retirees need their monthly payout to make ends meet.
In other words, Social Security income is a necessity, not a luxury, for most retired-worker beneficiaries. This means getting as much as possible out of Social Security takes on heightened importance for future generations of retirees.
But in order to maximize how much you'll collect during your lifetime, you first need to understand the ins and outs of how your benefit is calculated. According to an extensive report released six years ago, there are, statistically, advantageous and unfavorable Social Security claiming ages.
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These four elements are used to calculate your monthly Social Security retired-worker benefit
Although not all aspects of America's leading retirement program are easy to understand, the four elements that allow the Social Security Administration (SSA) to calculate your monthly retired-worker benefit are straightforward. These components are your:
- Earnings history
- Work history
- Full retirement age
- Claiming age
The initial two factors, your work and earnings history, are tied together. When calculating your monthly benefit, the SSA will take your 35 highest-earning, inflation-adjusted years into consideration. If you've held a well-paying job for decades, there's a good likelihood that you'll receive an above-average monthly benefit during retirement.
On the other hand, the SSA will penalize beneficiaries who don't have 35 years of qualifying work history. For every year less than 35 worked, the SSA will average a $0 into your calculation. If you have any hope of maximizing how much you'll receive from Social Security during your lifetime, you'll want at least 35 qualifying years of work history.
The third factor, your full retirement age, is the lone element that's beyond your control. Your full retirement age represents when you're eligible to initially collect 100% of your benefit, as determined by your birth year. Everyone born in or after 1960, which encompasses most of today's workforce, has a full retirement age of 67.
Last, but arguably most important of all, is your claiming age. Even though retired workers have the option of initially collecting their payout as early as age 62, there's a financial incentive to exercise patience. For every year an eligible worker waits to claim their benefit, beginning at 62 and continuing until age 70, their monthly payout can grow by up to 8%, as shown in the table below.
| Birth Year | Age 62 | Age 63 | Age 64 | Age 65 | Age 66 | Age 67 | Age 68 | Age 69 | Age 70 |
| 1943-1954 | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% | 132% |
| 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% | 96.7% | 104% | 112% | 120% | 128% |
| 1958 | 71.7% | 76.7% | 82.2% | 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% | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% |
Data source: Social Security Administration.
Statistically, this claiming age offers the lowest probability of being optimal
Despite this wide variance in percentages, every age within the traditional claiming range of 62 through 70 has its own unique advantages and drawbacks. However, maximizing your lifetime income from Social Security can be an entirely different story.
In 2019, researchers at United Income published a report ("The Retirement Solution Hiding in Plain Sight") that examined and extrapolated the claiming decisions of 20,000 retired-worker beneficiaries using data from the University of Michigan's Health and Retirement Study. Researchers aimed to determine which traditional claiming ages were optimal -- with "optimal" referring to the initial collection age that would have maximized lifetime income from the program.
The headline finding of the report was that only 4% of the 20,000 claimants examined made an optimal claim. This isn't too much of a surprise considering all the variables we don't know prior to collecting our benefits.
For example, without knowing ahead of time when we're going to die, there's always going to be some degree of educated guesswork involved with a retired-worker claim. Furthermore, every individual has their own unique puzzle that comes into play when claiming benefits. Factors such as personal health, marital status, retirement income needs, and tax implications mean there isn't a one-size-fits-all claiming age.
Nevertheless, United Income's statistical analysis found a clear bifurcation between actual and optimal claims.
Image source: Getty Images.
On one end of the spectrum, the report showed that 79% of the 20,000 retired workers initially chose to collect their payout from ages 62 through 64. The advantage of an early claim is not having to wait to get your hands on your payout. Conversely, early filers accept permanent monthly reductions of up to 25% to 30% when collecting as early as possible, depending on their birth year.
However, only around 8% of combined claims at ages 62, 63, and 64 proved optimal. The report notes, "only 6.5 percent of retirees would have more wealth if they claimed prior to turning 64," which means fewer than 2% of claimants at 64 would have maximized their income from Social Security. Statistically, age 64 offers the lowest probability of an optimal claim.
On the other hand, United Income's analysis found that only a low single-digit percentage of retired-worker beneficiaries waited until age 70 to initially collect their payout. But based on the extrapolated analysis by researchers, 57% of the 20,000 claims would have been optimal at 70.
Mind you, this doesn't mean every eligible retired worker will benefit by waiting until 70 to collect. Some of the unique variables described earlier, such a personal health, can come into play. For instance, if you have a chronic illness that's expected to shorten your life expectancy, an earlier claim (even one that reduces your monthly payout) is more likely to maximize the lifetime income you'll collect from Social Security.
But when viewed as an aggregate, future retirees who exercise patience are likely to get more out of Social Security during their lifetime.
