January 23, 2022

The Most Important Social Security Chart You’ll See This Year

You probably want to retire with some kind of plan so you know how much you can safely withdraw each year and how long your money will last. But when it comes to claiming Social Security, too often people skip the planning and just sign up when.

The problem is that when you sign up, it has a significant effect on how much you get out of the program. Below we look at how this works and how you can choose the best time to apply for benefits.

Senior staring intently at laptop.

Image source: Getty Images.

time is everything

First, you can’t determine the best time to apply for Social Security if you have your full retirement age (FRA). The government grants everyone a FRA based on their year of birth. For those turning 62 in 2022 and beyond, it’s 67. But for those already over 62, their FRA is younger.

You will have to wait for your FRA to claim benefits if you want the full monthly amount you are entitled to based on your work history. But you can sign up earlier or later if you want. Each month you claim benefits below your FRA will lower your checks slightly, while each month you defer benefits beyond your FRA increases your benefit until you hit your maximum benefit at 70.

Here’s a look at what effect claiming a month, one year, and five years earlier, as well as one month, one year, and three years later, averages $1,564 monthly Social Security benefits.

If you qualify for a benefit of $1,564 at your FRA of 67 and:

Your monthly benefit will be:

Start at 62


Start at 66


Start at 66 and 11 months


Start at 67


Starts at 67 and 1 month


Start at 68


Start at 70


Data source: Social Security Administration and Author’s Calculations.

As you can see, when you sign up for Social Security has a significant effect on the size of your checks. Starting at 70 can get you $844 more per month than signing up immediately at 62. And even if you start just a month early, you can cash your checks at $9 each. That may not seem like much, but in 20 years that will be over $2,100 lost.

How to choose the right time to sign up

Logging in later increases your checks, but it also means you receive fewer. If your goal is to get the largest lifetime benefit possible, the appropriate claim age will depend on your life expectancy.

If you qualify for the $1,564 monthly benefit mentioned above and you live to age 85, you’ll get about $349,020 from the program by waiting to sign up until 70. That’s far more than the $302,220 you’ll pay. would get by logging into 62 right away.

But if you’re only turning 75, starting early is a much smarter choice. You would get $170,820 from the program by signing up at 62, compared to just $116,340 if you signed up at 70.

We cannot know exactly when we will die, but you should be able to estimate based on your personal and family health history.

make a my social security account and use the calculator there to estimate your monthly benefit at different starting ages. Then multiply each of these numbers by 12 to get your estimated annual benefits. Finally, multiply your annual benefit by the number of years you expect to be entitled to Social Security to get your estimated lifetime benefit.

For one of the examples in this section, I multiplied the monthly benefit of $1,939 from the table above by 12 to get an estimated annual benefit of $23,268. Then I multiplied this by 15 to get the $349,020 lifetime benefit for someone who claimed benefits from 70 to 85.

We can’t always do what we want

We might know when we would Like it to apply for Social SecurityBut sometimes life has other plans. If you have to retire unexpectedly or if you or a family member becomes seriously ill or injured, you may need to sign up earlier, even if it wasn’t your original plan. But you shouldn’t let that discourage you.

As the table above shows, even delaying benefits by a month can have noticeable effects on your Social Security checks. Take the time to re-evaluate and see if you can live without Social Security for a month or two before applying. That way, you can still reap some of the benefits of deferring checks.

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