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We all know Social Security as a line-item on our paycheck – that is, one of the deductions taken out of the money we earn – and we all know it’s meant to come back to you in the form of retirement benefits. But beyond that, how much do you know about the retirement benefit Social Security provides, when it goes into effect, and how to best take advantage of it?

Social Security was created in 1935 by President Franklin Roosevelt to serve as a federal insurance program for all Americans, providing benefits to retired people as well as those who are disabled. Since then, Social Security has become a highly popular and heavily-depended-upon “entitlement” program. Though the future of Social Security has been uncertain for years, it is unlikely voters will stand for its dismantling – even attempts at reformulating have met with powerful pushback – which means that you need to know how to get the most out of it. In practical terms, that largely comes down to when you begin claiming your benefits.

Should I claim my Social Security retirement benefits when I stop working?

It’s important to research your options regarding when it’s best to claim Social Security. Claiming your Social Security benefits and leaving the workforce are two separate decisions: You don’t have to claim your benefits when you stop working, and you can continue to work even after you claim your benefits.

While many people choose to claim their benefits when they stop working, you can time these decisions in a way that’s best for you. If you claim your benefits before what the Social Security Administration calls the full retirement age, and you continue to work, and you make more than a specified amount, your benefits will be reduced temporarily via the Social Security earnings test. What many people do not know, however, is that once you reach full retirement age, Social Security recalculates your benefit and credits you for any months that you were affected by the earnings test.

Tip: Check out this easy tool to get a rough estimate of your Social Security benefit, and see how your benefit changes depending on the age at which you claim it.

Do I get more money if I claim my Social Security retirement benefits as soon as possible?

Not necessarily, because the earlier you claim your retirement benefits, the less money you’ll receive each month. The total amount of money you receive in benefits over your lifetime depends largely on how long you live.

For example, if you live to about the age of 78, you’ll get the same total amount in benefits regardless of whether you claimed at age 62 or at your full retirement age (either 66 or 67; see below). If you live beyond the age of 78 (and chances are good that you will), you get a larger monthly check and a larger total amount over your lifetime by claiming at your full retirement age, compared to claiming at age 62.

Here’s why it could be important, as you age, to try for the highest possible monthly benefit:

  • Social Security usually has an annual cost-of-living adjustment, ensuring the value of your Social Security benefit keeps pace with inflation for as long as you live; the more your monthly benefit is to start with, the more this adjustment will be worth.
  • Many people now spend 20 years or more in retirement. Because Social Security pays you monthly for as long as you live, a higher monthly amount can help you secure your financial situation in later years as savings and other sources of income are depleted.

Tip: Check out this tool to learn more about your lifetime benefits, and why longevity matters for your claiming decision.

Will the age at which I claim my Social Security retirement benefits affect how much I get each month?

Yes: The later you claim your benefits, the more you get each month.

You are eligible to claim your Social Security retirement benefits without any reduction at what the Social Security Administration calls “full retirement age.” For people born after 1942, the full retirement age is either 66 or 67, depending on your birth year.

Your monthly benefit increases each month that you wait after your full retirement age, up to age 70. By claiming after your full retirement age, you can permanently increase your monthly benefit by as much as 32 percent. By claiming at age 70, you get the maximum possible monthly benefit. There is no additional benefit to be gained by waiting until after age 70.

Should you claim your benefits before reaching full retirement age, your benefit is reduced depending on how many months are left before that particular birthday. You can claim your benefit as early as age 62, but this reduces your monthly benefit by as much as 30 percent. Claiming at age 62 means you get the lowest possible monthly benefit.

All told, monthly payments are 75 percent greater for those who collect at age 70 compared to those who claim at age 62. For example, for someone with an expected monthly benefit of $1,000 at full retirement age, the expected monthly benefit at age 62 is $750, while the expected monthly benefit at age 70 is $1,320.

Tip: For more information about your particular case, including your full earnings record and a copy of your Social Security statement, you can open a “my Social Security” account.

Adapted from this article by the Consumer Financial Protection Bureau.


On Social Security
Before you claim social security explore our new planning for retirement tool (Consumer Financial Protection Bureau)
Thinking about when you’ll claim social security benefits is time well spent (Consumer Financial Protection Bureau)
Understanding Social Security (Social Security Administration)
Social Security and the retirement estimator tool (Social Security Administration)
Your retirement benefit: How it’s figured (Social Security Administration)

The content on provides general information and does not constitute legal, tax, accounting, financial, or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information; do not endorse any third-party companies, products, or services described here; and take no liability for your use of this information.

© Georgia Center for Nonprofits 2019

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