2. Delay Claiming Past Your Full Retirement Age

Timing dictates your benefit size more than almost any other factor. You become eligible to claim retirement benefits at age 62, but doing so triggers a permanent reduction of up to 30% compared to what you would receive at your Full Retirement Age (FRA). For anyone born in 1960 or later, your FRA is 67.

Patience pays extraordinary dividends in the Social Security system. For every year you delay claiming past your FRA up to age 70, you earn Delayed Retirement Credits (DRCs) that boost your monthly check by 8% per year. Combined with annual Cost-of-Living Adjustments (COLAs), delaying until 70 transforms a modest baseline benefit into a substantial income stream.

“Every year you delay claiming Social Security between your full retirement age and age 70, your benefit increases by a guaranteed 8%. You cannot find that kind of guaranteed return anywhere else.” — Suze Orman, Personal Finance Expert

Consider the impact of claiming at different ages for a hypothetical retiree whose FRA is 67 and who qualifies for a baseline benefit of $2,000 per month.