Choosing when to apply for Social Security is one of the most influential retirement decisions you’ll make. There’s not a wrong call per se, but there are definitely some claiming ages that could net you a better quality of life than others.
Understanding how the government calculates your checks is crucial for maximizing your benefits, but that’s where a lot of people get tripped up. For example, some believe they’ll get a benefit boost at 65, maybe enough to offset the early claiming penalty for signing up at 62. But the truth is more complicated.
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What happens to your Social Security benefit at 65?
There’s actually nothing special about age 65 when it comes to Social Security, at least not anymore. The three big claiming ages are:
- 62: This is when you become eligible for Social Security benefits. About 23% of Americans claim within a year of becoming eligible.
- Full retirement age (FRA): This is when you become eligible for the full Social Security benefit you’ve earned based on your work history, also known as your primary insurance amount (PIA). It used to be 65, but now it’s between 66 and 67, depending on your birth year. Fifteen percent of workers claim then.
- 70: This is when you become eligible for your largest Social Security checks. Less than 9% of workers manage to claim these.
You can claim Social Security at other ages as well. How much you’ll get depends on where you’re at relative to your FRA. Claiming under your FRA, including at 65, reduces your benefit. You lose 5/9 of 1% per month for up to 36 months of early claiming. That amounts to a 6.67% to 13.33% reduction for 65-year-old applicants. It would knock about $128 to $255 off the $1,931 average Social Security benefit as of March 2024.
But that’s a small reduction compared to those who apply immediately at 62. They’ll face a 20% penalty for claiming three years early, plus an additional penalty of 5/12 of 1% per month for an extra one to two years. This brings the total benefit reduction to 25% for those with an FRA of 66 or 30% for those with an FRA of 67.
Looking at things from this angle, you could say that claiming at 65 increases your Social Security checks compared to starting right at 62. But this only counts for those who haven’t signed up yet. Once you apply for Social Security, your checks are usually locked in for the rest of your life. However, there are a few exceptions to this rule.
How to boost your Social Security checks if you applied early
There are three ways you can boost your future Social Security checks if you claimed early and regret penalizing yourself:
Withdraw your Social Security application
This is only an option for those who applied for Social Security less than a year ago. You must contact the Social Security Administration and notify it of your wishes. Then, you have to pay back all the money you and any family members claiming on your record have received from the program to date.
If you manage that, the government will treat you as if you’ve never claimed before. When you apply again later, you’ll get larger checks. But this is a one-time option.
Earnings test
The Social Security Administration automatically withholds some benefits from workers who claim under their FRA if they earn too much from a job. This is known as the earnings test. You’ll lose:
- $1 for every $2 you earn above $22,320 if you’re under your FRA all year, or
- $1 for every $3 you earn above $59,520 if you’ll reach your FRA in 2024 and exceed this amount before you reach your FRA
This will shrink your checks in the short term, but the money comes back to you when you reach your FRA. The Social Security Administration recalculates your benefit then and increases it to make up for what it withheld previously.
Suspend your benefits at your FRA
You can also voluntarily suspend your benefits when you reach your FRA. If you do this, the government won’t send you any more checks until you request that they start again or reach 70. Your benefit will grow by 2/3 of 1% per month, or 8% per year, during the time it’s suspended.
You don’t have to take any of the above steps if you don’t want to. If you’re happy with your decision to claim at 65 or earlier or you cannot afford to give up your checks, that’s OK. Everyone’s situation is unique and even if you claim early, you could still wind up with hundreds of thousands of dollars in benefits over your lifetime.
