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Why Retiring at Age 70 Could Mean More Social Security Benefits Than You Think
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social security benefits They play a key role in the retirement plans of many Americans – approximately 51 million retirees receive these benefits each month. For people 65 and older, these monthly payments represent about 30% of their income. October 2024, monthly average social Security The benefit for retired workers is $1,924.35. But the actual amount you receive each month depends in part on your age when you start receiving benefits.
Main points
- The amount of Social Security benefits depends on several factors, including your age when you start receiving these benefits.
- Wait until age 70 Maximize your Social Security benefits.
- Once you start receiving Social Security benefits, you will receive them for life.
How are your Social Security benefits calculated?
The Social Security Administration uses four key factors Calculate your profit:
- Work experience: You must work at least 35 years to receive the maximum benefits.
- Profit history: SSA is calculated based on your average indexed monthly earnings during your 35 highest earning years.
- full retirement age: This is the age at which you qualify for full benefits.
- claimed age: This is the age at which you actually start receiving benefits.
The SSA uses your average earnings over the 35 years in which you earned the most, adjusts it for inflation, and applies a formula to that number to come up with your base benefit.
Your average Social Security benefit at ages 62, 67 and 70
There are three milestones for receiving Social Security benefits: age 62 is the earliest age you can collect benefits, age 67 is the full retirement age for most people, and age 70 is when monthly benefits stop increasing if you delay taking benefits past full retirement age.
To understand how waiting to receive benefits affects your payments, here are the average monthly benefit amounts for each age group as of December 2023:
| age | benefit | ||
| All retired employees | retired man | retired woman | |
| 62 | $1,379.75 | $1,528.62 USD | $1,242.33 |
| 67 | $1,852.82 USD | $2,061.41 USD | $1,650.52 USD |
| 70 | $2,021.81 USD | $2,237.87 USD | $1,806.10 |
The later the better
If you start collecting Social Security benefits early, you will receive less than if you wait until age 70 to start collecting them. The difference can be huge. For example, if you were born after 1960, your full retirement age is 67. If you choose to receive benefits at age 62, you will receive only 70% of the primary coverage amount you received at age 67. If you wait until you are 70, you will receive 124% of the base insurance rate.
For example, your primary coverage amount at age 67 is $1,000. If you start receiving benefits at age 62, you will receive $700. If you wait until age 70, you will receive $1,240.
cost of living adjustment
The Social Security Administration regularly increases its benefit checks through cost-of-living adjustments (COLA). In 2025, the COLA will be adjusted to 2.5%.
bottom line
Social Security benefits make up an important part of your retirement income. The later you start collecting these benefits, the more benefits you can receive. However, it’s important to remember that these benefits shouldn’t be your only source of income in retirement. Investing in retirement accounts like 401(k)s and IRAs can also provide the funds necessary to help you live comfortably through retirement.
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