When Should You Claim Social Security?
Deciding when to start Social Security benefits is one of the most important retirement decisions you will make. A social security calculator estimates your monthly benefit at different ages so you can compare the trade-offs. The choice usually comes down to receiving a smaller check earlier or a larger check later.
Your full retirement age, or FRA, depends on your birth year. For anyone born in 1960 or later, FRA is 67. If you claim before FRA, your monthly benefit is permanently reduced. If you delay past FRA, up to age 70, your benefit increases each year through delayed retirement credits.
What Full Retirement Age (FRA) Means
FRA is the age at which you can receive your full, unreduced benefit based on your earnings history. Claiming at 62, the earliest allowed age, can reduce your benefit by roughly 25 to 30 percent depending on your FRA. Claiming at 70 can increase your monthly check by 24 percent or more compared with claiming at 67.
There is no single right answer for everyone. If you expect to live a long life or have modest savings, delaying can pay off in higher lifetime income. If you need income sooner or have health concerns, claiming earlier may make sense. The break-even point usually falls in your late seventies or early eighties.
How Benefits Are Calculated with PIA and Bend Points
The Social Security Administration uses your highest 35 years of earnings to compute your average indexed monthly earnings, or AIME. It then applies a formula with bend points to determine your primary insurance amount, or PIA. Lower earners receive a higher percentage of their earnings than higher earners, which makes the system progressive.
Please remember this tool is only an estimate and not official SSA data. For full retirement planning, combine it with our retirement calculator and our 401K calculator.