A general social security advice is that if you want to get bigger monthly payments, it's worth the wait. Many older Americans use social security at their earliest possible age when they are 62 years old, and this results in a significant pay cut compared to what they would receive if they were to wait until full retirement age.
Social security goes one step further in pensions In addition, a bonus must be paid to those who wait beyond the full retirement age to receive benefits. This bonus is granted in the form of late retirement credits. Slowly but surely the maximum number of late retirement savings that new retirees can claim is falling ̵
Social security bonus on late retirement
The amount of monthly pension benefits workers receive depends on their age When you retire, the calculations that the Social Security Authority uses to determine the exact amount of benefit are based on a single basic principle: Payments should be approximately the same, no matter when you claim them, as long as you have a normal life expectancy  There is a lot of complex actuarial input into the rules, but in fact with the rule is not too heavy, basically it amounts to three things:
For those who If you want to retire late, the social security bonus gives you two-thirds of a percent your basic retirement for each month you wait beyond the full retirement age. When you're 70 years old, your late retirement credit is maximized.
To make this clearer, say that at the beginning of 2019, you are just 66 years old and are thinking about retiring. Your social security statement states that your periodic benefit would be $ 1,800 a month. However, you are considering suspending your benefits for a few years until you reach the age of 68.
For someone born in 1953 and coming of age in 2019 The retirement age is 66 years. If you want to wait two years, it's 24 months. 24 months, multiplied by two-thirds of a percentage, gives 16%. Your bonus amount is 16% of $ 1,800 or $ 288 per month. This amount is valued in today's dollars and is subject to the same upward revisions for inflation as you would if you were to use them now.
Why younger workers will see a lesser bonus for waiting
In the above example, the worker chose 24 months. However, as the employee's full retirement age was 66 years old and you can earn late retirement pension benefits up to the age of 70, it would have been possible to wait 48 months – with a 32% bonus.
However, full retirement age for younger workers is going. If you were born in 1955, your full retirement age is 66 years and two months. For the later born, the age increases by two months, until it is 67 years old for the 1960 or later born.
Since late retirement assets are always a maximum of 70, a higher full retirement age means a lower waiting time bonus. For someone who reaches the full retirement age of 67 years, waiting for retirement age up to the age of 68 would only mean 12 months of delayed bonuses with a bonus of 8%. That's $ 144 less per month than in the example above. The maximum you could ever get would be a bonus of 24% if you waited until the age of 70 years.
What it means to you
Remember that you only receive a bonus if you wait beyond full retirement age to claim your own retirement benefits. Spouse benefits receive no bonus, so it rarely makes sense to wait no longer than full retirement to receive them.
The fact that fewer pension retirements are available to retirees is not the case for those whose retirement age is higher Do not change the general principle that waiting leads to more money. If you retire at the age of 66, when you are 67 years old, you will be penalized for 19459009 compared to your full benefit.
However, if you claim that social security is a personal choice, there are many financial aspects to it. It is important to know not only the current bonus that later retirees will receive for waiting, but also the implications for future retirees, so that you can make the best choice for your situation.