Retirement Age: How to Maximize Your Lifetime Social Security Income

Boston, MA – When it comes to planning for retirement, many individuals may face the difficult decision of when to claim their Social Security benefits. The amount of monthly income you receive from Social Security is based on several factors, including your lifetime earnings and the age at which you choose to file for benefits.

Full retirement age (FRA) is a key factor to consider when deciding when to start receiving Social Security benefits. Depending on the year of your birth, FRA can range from 66 to 67 years old. While you are entitled to your full monthly benefit at FRA, you have the option to start receiving benefits as early as age 62, or to delay your filing past FRA to receive a boosted monthly benefit.

Delaying Social Security benefits past FRA can result in an 8% increase in monthly benefits for each year of delay, up to age 70. This may seem like a lucrative financial decision, but it’s essential to consider not only the immediate monthly benefits but also the impact on your lifetime Social Security income.

In some cases, delaying benefits may not necessarily lead to a higher lifetime income, especially if you have a shorter life expectancy. It is crucial to calculate your break-even point, or the age at which the total amount received in benefits becomes the same, regardless of when you started receiving them. If you have health issues or a family history of shorter life expectancy, an early filing for Social Security benefits could potentially result in higher lifetime income.

The decision of when to claim Social Security benefits is inherently challenging, as it involves uncertainties about life expectancy and financial needs. It’s important for individuals to consider both their monthly and lifetime income from Social Security when making this decision, as it ultimately impacts their long-term financial security in retirement. By carefully evaluating their options and considering their unique circumstances, individuals can make an informed choice that aligns with their financial goals and retirement plans.