Once you stop working, your income likely comes from savings, investments, and retirement benefits. Because of this, it helps to understand how to potentially increase Social Security benefits after retirement. The choices you make could affect your retirement income for the rest of your life.
Key Social Security Ages
Your Social Security retirement benefit depends on several factors. These include your earnings during your working years and when you decide to claim benefits. Here are common scenarios and retirement age milestones.
Claiming Early
Most people can claim retirement benefits as early as age 62. However, the Social Security Administration reduces your payment if you claim before your full retirement age.1 Your full retirement age depends on the year you were born.2
If you claim early, your benefits are reduced based on how long you will receive them before reaching full retirement age. For example, starting benefits at age 62 may reduce your benefit by 25 to 30 percent, depending on your birth year.
If you continue to work after claiming early, your benefit may be temporarily reduced if your earnings exceed certain limits. These limits apply until you reach full retirement age.
Claiming at Your Full Retirement Age
If you wait until your full retirement age, you receive your full retirement benefit. You can also earn income without a reduction in your Social Security payment.
Waiting to Claim
Delaying benefits beyond your full retirement age can increase your monthly payment. If you are looking for ways to increase Social Security benefits after reaching full retirement age, this is one option.
For those with a full retirement age of 66, benefits may increase by 8 percent for each full year you delay, up to age 70. After age 70, delayed retirement credits stop. By waiting until age 70, you could receive up to 132 percent of your full retirement benefit.3
What Happens if You Keep Working?
If you claim Social Security early and continue working, your benefits may be reduced if your earnings are too high. However, working longer may still be beneficial, especially after reaching full retirement age.4
Continuing to work can increase your Social Security benefit if you add higher earning years to your record. Social Security calculates benefits based on your highest 35 years of income. If you replace lower earning years with higher ones, your benefit amount may increase.5
If you continue earning income, you may not need to withdraw as much from your retirement savings. This may allow your savings to last longer and give you more flexibility later in retirement.
Factors to Consider
Longevity
When to start receiving Social Security benefits often depends on your health and life expectancy. If you expect to live a long life, delaying benefits may result in more total income over time. If you have health concerns or a shorter life expectancy, claiming earlier may make more sense.
Spousal Benefit
If you have a spouse who may claim benefits based on your record, your decision affects them as well. Claiming early can permanently reduce the amount available to a surviving spouse.
Assets Available
If you cannot continue working, you may need to rely more heavily on your savings. If you have substantial savings, you may have more flexibility to delay benefits. If your savings are limited, claiming earlier may help cover expenses.
Cost-of-Living Adjustments
Social Security payments may increase with inflation through cost-of-living adjustments. These increases are based on a percentage set by the Social Security Administration. If you delay benefits and receive a larger monthly amount, future adjustments will apply to that higher base, resulting in larger dollar increases over time.
Should You Claim Now or Wait?
Deciding when to claim Social Security benefits is personal. It depends on your health, income needs, savings, and family situation. Reviewing your options and weighing the trade-offs can help you make a choice that supports your long-term retirement goals.
Strategic timing can help increase your Social Security and retirement benefits. Start Your Free Plan
Sources
- You Can Receive Benefits Before Your Full Retirement Age. https://www.ssa.gov/benefits/retirement/planner/applying2.html.
- Starting Your Retirement Benefits Early. https://www.ssa.gov/benefits/retirement/planner/agereduction.html.
- If you were born between 1943 and 1954 your full retirement age is 66. https://www.ssa.gov/benefits/retirement/planner/1943-delay.html.
- Receiving Benefits While Working. https://www.ssa.gov/benefits/retirement/planner/whileworking.html.
- Your Retirement Benefit: How It’s Figured. https://www.ssa.gov/pubs/EN-05-10070.pdf.
