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Social Security will hit a major milestone in 2027 because that’s the year people born in 1960 will turn 67. This means they will reach full retirement age (FRA), when you can claim 100% of your earned Social Security benefits.
Since 1983, the FRA for longevity has been gradually trending upward, According to the Social Security Administration (SSA). It was originally 65 years old. 67 will apply to all new applicants for the first time next year.
When can you claim Social Security?
Although you are entitled to all of your earned Social Security benefits at your full retirement age, you can claim them before age 62. However, your check will be much smaller than if you waited.
In form of Education for all campaign notedYou will receive only 70% of your accrued benefits at age 62. This percentage will be given as your age increases:
- age 63: 75% of your earned profit
- age 64: 80%
- age 65: 85%
- age 66:90%
- age 67: 100%
The biggest payout comes if you delay applying for benefits until age 70. After that, there is no financial benefit in waiting.
Benefits of delaying your claim
When it comes to claiming Social Security, delaying it even a year can “significantly increase” your monthly income, according to Nancy Gates, leading educator and financial coach. boldinA financial planning platform that helps you strategize retirement planning.
“After full retirement age, up to age 70, Social Security benefits grow about 8% annually,” he told GOBankingRates. “For a high-income individual, delaying it by one year could increase monthly income by about $200, adding about $50,000 over a 20-year retirement.”
For an average earner, a two-year delay equates to an increase of about $200 per month, which could be worth about $48,000 over 20 years. The financial benefits actually increase if you wait as long as possible before applying for benefits.
“The difference between claiming at 62 versus 70 could be as much as $500,000 in lifetime value,” Gates said.
One month = thousands of dollars
Even waiting a month before applying for benefits can increase your Social Security payment.
For example, when you file at age 66 years and 11 months, you are entitled to 99.4% of your accrued benefits. If your total accrued benefits are $3,000 per month, your check at age 66 years and 11 months will be $2,982.
Withholding an extra month means you’ll get the full $3,000 – or an extra $18 per month for the rest of your life. If you live another 25 years, this increases to $5,400.