Social Security benefits increase by 8 percent per year for every year a worker defers claiming benefits beyond full retirement age up to 70. For those whose full retirement age is 66 (persons born from 1943 to 1954), delayed-retirement credits can boost maximum Social Security benefits to 132 percent of the full retirement age amount if collected at 70.
Although eligible workers can still claim benefits as early as 62, their benefits are reduced by 25 percent, trimming a $1,000 monthly benefit at 66 to just $750 if claimed at 62. Waiting until 70 to collect benefits increases the monthly amount to $1,320, plus any intervening annual cost-of-living adjustments.
Given that Social Security is a particularly valuable type of income — inflation-adjusted and lasts for a lifetime — it generally makes sense for workers to postpone claiming as long as possible to get the highest monthly amount, assuming they are in good health for their age,” Alicia Munnell, the center’s director, wrote in the paper. “The level of monthly benefits at 70 appears appropriate, given the increased deduction for Medicare premiums, the greater taxation of benefits, the declining importance of the spouses’ benefit, and the diminished sources of other retirement income,” Ms. Munnell wrote. “In that regard, 70 has become the new 65.”
If you need assistance evaluating your Social Security benefits for retirement, call Courtney Elder Law Associates today at 601-987-3000.