Waiting to claim Social Security benefits can significantly boost your guaranteed lifetime income in retirement.
If you wait until you're 70 years old to claim Social Security, you can raise your monthly benefit check by up to 76 percent, according to research by David Laster, Bank of America Merrill Lynch's head of retirement strategies, and Anil Suri, the firm's head of portfolio construction and investment analytics. That wait can reduce the risk of outliving your money in retirement and, for many, increases expected lifetime benefits.
Retirees are getting better at delaying gratification. The earliest Americans can claim Social Security retirement benefits is at age 62, but if they do, those benefits will be reduced as the recipients are not yet at full retirement age. Nonetheless, last year, 35.5 percent of men and 40.8 percent of women who started collecting Social Security claimed benefits at that age, according to the Social Security Administration. Those figures are much better than a decade earlier when half of men and 54.9 percent of women filed for Social Security at 62.
But only 41.5 percent of men and 34.9 percent of women filed for Social Security last year at full retirement age, the time when you collect full benefits, or later. If you were born between 1943 and 1954, you can claim full benefits at age 66. If you were born between 1955 and 1959, your full retirement age increases by two months for each additional year. If you were born in 1960 or later, you can claim full benefits at age 67. Retirement benefits grow by about 7 to 8 percent each year from age 62 until age 70.