How Delaying Social Security Benefits Can Boost Your Retirement Income

August 14th is the 79th anniversary of Social Security. For most people, Social Security benefits are an important part of their retirement income plan. Yet, there are many factors that determine how much your benefits will be and when you should take them.

Most people receive their full social security benefit somewhere between age 66 and 67, also known as Full Retirement Age (FRA). Generally, benefits may be taken as early as age 62, but it comes with a price.

The benefit you would have received at Full Retirement Age (FRA) is reduced by as much as 30% or more if you start receiving benefits at age 62, resulting in a lower monthly payment for the rest of your life. Of course, the exact amount of your reduction depends on your age and other factors.

Conversely, when you delay your benefits beyond FRA to age 70, your monthly Social Security check increases by as much as 25%. This results in a higher monthly payment for life. In fact, if you live long enough you could collect more money per month and pocket more money over your remaining lifetime by delaying your social security benefits by just a few years.

Social Security will likely change in the years ahead, but for most people age 55 and older, it will remain an important part of their retirement income strategy. Knowing the optimal time to take your benefits and how to structure them can be complicated and the right answer will depend on your unique situation.

Creating a retirement income plan that includes Social Security planning is the key to making the best choice for you and your family. To learn more about how Social Security and retirement planning can work together, watch the short video below.