Need another reason to delay claiming Social Security? An extra year of work could earn you a bigger benefit.
Your Social Security benefit at full retirement age is based on your highest 35 years of earnings. For 46 percent of women and 15 percent of men, working until age 63 instead of 62 replaced a zero-income year in that calculation, according to a new working paper from the Center for Retirement Research at Boston College.
If late-career earnings replace a zero in the calculation of your benefits, you could see an increase in the benefit you're entitled to at full retirement age (aka the primary insurance amount, or PIA). The calculation lets low earners keep a bigger share; every dollar in late-career earnings could increase your PIA by 15 to 90 cents, according to the paper.
"We were really surprised at how many people have zeroes in that top 35, especially women," said study author Matt Rutledge, a research economist at the center.
The big benefit of delaying is in the actuarial adjustment of when you claim Social Security in relation to your full retirement age. Claiming before your full retirement age permanently reduces your benefits; each year you delay from full retirement age until you turn 70 boosts the total by 8 percent.