Delaying the point at which you start taking federal retirement benefits can add a lot to your monthly checks.
Those who claim at 70 can expect their monthly payments to be 77% larger than they'd get if they claimed at 62.
There are reasons to claim benefits early, but most people will be better off delaying as long as possible.
People who wait until they turn 70 to claim Social Security can expect to receive a lot more in monthly benefits than those who file early.
The majority of personal finance experts agree that waiting until you turn 70 to claim Social Security is a good bet.
The advantage of waiting until 70 is clear: You get much bigger monthly checks. While you can claim benefits based on your own work record starting at age 62, you'll receive slightly bigger checks every month you delay beyond that. And the difference can add up. Someone claiming at 70 can receive a check 77% larger than if they claimed at 62.
And thanks to the long-term rise of life expectancy, waiting until 70 can maximize lifetime benefits for most retirees. With that in mind, here's what the average retiree receives in Social Security benefits at age 70.
Image source: Getty Images.
There are three things that go into determining how much you'll receive in monthly Social Security retirement benefits.
Every January, the Social Security Administration receives information from your employer about how much you earned the previous year (if you're self-employed, it will pull that data from your tax return). When it comes time to calculate your retirement benefits, it takes your 35 highest-earning years (adjusted for inflation) and calculates your average monthly income from them. It plugs that number into the Social Security benefits formula and determines the amount you'll receive if you claim benefits at what the government has set as your full retirement age. This is called your primary insurance amount.
Your full retirement age is determined by the year you were born. Those born in 1954 or earlier reached full retirement age at 66. Full retirement age has been increasing by two months for each year a person was born after 1954. But for everyone born in 1960 or later, it's 67.
With those two factors determined by the time you retire, there's just one thing left within your control that can influence the size of your monthly checks: when you claim. While you can claim starting at 62, doing so before your full retirement age means you'll receive less than your primary insurance amount -- by a fraction of a percent for every month early you claim. On the other hand, waiting past your full retirement age will entitle you to delayed retirement credits that increase your check by 0.67% for each month you postpone, up until you reach 70. That adds up to an 8% boost per year.
Here's what claiming Social Security at various ages looks like 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 | 124% |
Data source: Social Security Administration. Calculations by author.
Clearly, waiting until 70 results in a substantially larger monthly benefit than claiming early.
That shows up elsewhere in the data, too. In Dec. 2022 (the most recent month for which this data is available from the Social Security Administration), the average benefit for a 70-year-old was $1,963.48. By comparison, the average 62-year-old received just $1,274.87 in benefits that month.
But readers should note, the vast majority of 70-year-olds collecting Social Security benefits originally claimed their benefits well before they turned 70. That means the average benefit at 70 doesn't fully reflect the difference of waiting until delayed retirement credits have maxed out before claiming.
There were nearly 309,000 people who waited until age 70 to apply for Social Security benefits in 2022. The average monthly benefit for those claimants was $3,027.00. That's more than 50% higher than the average benefit for all 70-year-old recipients mentioned above.
And when you compare that to what the average retiree who applied at 62 received, the impact is even more substantial. The 808,000 retirees who applied for Social Security benefits at age 62 in 2022 received an average benefit of just $1,287.61. That's a difference of $20,873 per year compared to those claiming at age 70.
Readers should note that for any given person, the maximum increase they can get delaying benefits from 62 to 70 is about 77%. Meanwhile, the average person applying for benefits at 70 receives about 135% more than those applying at 62.
That suggests those who delay claiming until 70 earned more on average in their careers than those claiming at 62. That could be in part because those waiting until 70 continued to work in their 60s when their earnings were higher than earlier in their careers. Some retirees claiming at 62 could also have had their work history cut short by health issues or a sudden layoff late in their career. In those cases, claiming at 62 may have been the right move for them, even if it meant accepting a smaller monthly benefits check.
The average retiree who doesn't have any health problems and is able to work a full career and stash away plenty for retirement will likely be better off by delaying their claim until 70. While you'll have to give up eight years of Social Security checks upfront, that move usually pays off in the long run.
You can use the earlier years of your retirement to develop a tax-efficient retirement account withdrawal strategy and eventually enjoy the larger Social Security benefits. A 2019 study from United Income found the majority of retirees would maximize their chances of being able to afford retirement by delaying Social Security until 70.
There's a reason personal finance experts overwhelmingly suggest anyone who can afford to wait until they turn 70 before claiming Social Security should do so. While each individual case is different, it works out best for the majority of people.
