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How a lot does my Social Security profit improve once I delay submitting?

A latest e mail reads (partially) as follows: I’m approaching age 62 once I can file for my Social Security….

By Staff , in Social Security , at May 11, 2022

A latest e mail reads (partially) as follows:

I’m approaching age 62 once I can file for my Social Security. I’ve heard that if I file at age 62 my profit shall be penalized probably the most, and that if I wait to file my profit will improve by 8% for yearly that I wait.

Is that this appropriate?

Pricey reader, 

You’re partly appropriate, and also you’re heading in the right direction with the remainder of your assertion, just a bit off on the precise quantities.

It’s true that for those who file on your Social Security profit at age 62 your profit shall be lowered to the minimal quantity. It is usually true that for every year that you just delay, your profit will improve, nevertheless it’s not all the time by 8% per 12 months.

Learn extra about Social Security on MarketWatch

To raised perceive the year-over-year will increase, we have to assessment the principles concerning the early-filing reductions. For the 36 months nearest to your Full Retirement Age (67 for folk born in 1960 or later, a bit much less for many who had been born earlier), the discount quantities to five/9 of 1% for every month. So for those who file precisely 36 months (3 years), earlier than your Full Retirement Age (FRA), the discount to your profit shall be 20%. We get this consequence by multiplying 5/9% by 36 (180/9 = 20).

For any months better than 36 earlier than your FRA, the discount is calculated as 5/12 of 1% per 30 days. Successfully, this ends in a 5% discount in advantages for every 12-month interval better than three years earlier than your FRA.

The utmost discount in advantages happens if you file for Social Security advantages at age 62, your earliest age of eligibility. In case your FRA is 67, age 62 is 60 months (5 years), earlier than your FRA. So we all know that there shall be a discount of 20% (because it’s greater than 36 months) plus the extra months better than 36. 60 months minus 36 months equals 24 months. The discount for this extra 24 months is 10%, as 24 instances 5/12% equals 10% (120/12 = 10).

Learn: A majority of staff have faith in Social Security — do you have to?

Then later, after FRA, there may be one other sort of improve, referred to as a Delayed Retirement Credit score. This credit score is 2/3% per 30 days, for a complete of 8% for yearly of delay. (That is the place the 8% improve for every year of delay comes from, nevertheless it doesn’t precisely work out such as you’d suppose. Learn on.) To study extra about Delayed Retirement Credit, click on this hyperlink. 

As a way to perceive how a lot your profit will improve for every year of delay (beginning at age 62) we have to calculate the profit quantities at every age degree and evaluate. I’ve put these within the following desk, together with the year-over-year improve proportion:


Profit quantity

Yr-over-year improve



























This desk relies on somebody who has a FRA of 67, and this particular person’s profit out there at age 67 (also referred to as the Major Insurance coverage Quantity, or PIA) is $1,000. You possibly can see this by wanting on the age 67 line, displaying $1,000 of profit.

Annual COLAs (Value of Residing Changes) haven’t been factored into this desk, as that might complicate issues and make it incomprehensible.

As displayed within the desk, the precise improve year-over-year ranges from as little as 6.67% as much as 8.33% — it’s not all the time an 8% improve year-to-year. Actually, regardless that 8% is quoted very often (as a result of it’s the quantity used for the calculation of DRCs), there is just one year-over-year interval when the rise is strictly 8%, and that’s the first 12 months after your FRA. It’s because the DRC will increase aren’t compounded, however relatively accumulative. The 8% delay credit score for every year is just added to the earlier 12 months’s 8%, so two years’ delay is 16%; three years is 24%, and so forth.

Due to this accumulative nature of the rise, the year-over-year price of improve is lower than 8% for every subsequent 12 months.

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