So to increase your checks by 24%, you need to postpone the start of charging your benefits for three years after your full retirement age. If that age is 66 and you defer for four years, you can increase your checks even more – by about 32%. Each year you delay, your checks increase by about 8%.
So when should you start collecting benefits?
Clearly, delay can be powerful. But it’s not the right move for everyone. First, many people simply can not afford to postpone starting to collect. Many people stop working earlier than expected due to a job loss or illness, and social security income may simply be necessary to keep them afloat.
Many others have a decent chance of living shorter than average, based on the life expectancy of their relatives, and for them, starting to collect early can help them make the most of social security.
Think about your own situation while deciding when to start charging your own benefits. If you have many family members who lived to 90 and over, it is a promising sign of your own longevity. If you have sufficient financial reserves to support yourself while you postpone to start collecting social security, or if you enjoy your job and plan to continue working until age 70, there are also good reasons to consider postponing.
It can also be smart to postpone as long as possible if you are married and have earned significantly more through your working life than your spouse. This is because when one spouse dies, the rules of social security allow the survivor to collect either their own benefits or those from their spouse – whichever is greater. So maximizing your checks means that your spouse, if they survive you, will be able to collect your large benefit checks.