When it comes to signing up for Social Security, you have choices. You could claim benefits as early as age 62, or you could delay your filing all the way to your 70th birthday. In fact, technically, you don’t have to sign up by age 70, though delaying your filing past that point won’t benefit you financially.
In the middle of that age range is full retirement age (FRA) for Social Security purposes, and it’s when you’re entitled to collect your complete monthly benefit based on your wage history. Even though you have the option to claim Social Security before or after FRA, filing at your precise FRA could really work to your advantage.
What’s your FRA?
Before we talk about why claiming Social Security at FRA makes sense, let’s make sure you know when your FRA is. That age is a function of your year of birth, and you can use this table to see what it is:
| Year of Birth | Full Retirement Age |
|---|---|
| 1943-1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 or later | 67 |
Data source: Social Security Administration.
Why sign up at FRA?
The upside of waiting until FRA to claim Social Security is not having your monthly benefit reduced. And that’s important, because the monthly benefit you lock in at the time of your filing is the amount Social Security will pay you for life (more or less). There are cost-of-living adjustments you’ll be eligible for, but those are still based on the same initial benefit you lock in.
If you claim Social Security at age 62, for example, you’ll slash your monthly benefit by 25% to 30% on a permanent basis (the exact percentage will hinge on your precise FRA). And that might leave you cash-strapped as a senior, especially if you end up retiring with a nest egg that isn’t as robust as you would’ve liked.
Of course, there’s also the option to delay your Social Security filing past FRA. For each year you do, up until age 70, your monthly benefit gets an 8% boost.
All told, you have the potential to increase your benefits a lot by delaying your filing until your 70th birthday. But there’s a risk in going that route, like not living long enough to make that decision worthwhile financially.
Let’s say you’re entitled to a monthly Social Security benefit of $1,800 at an FRA of 67. Delaying your claim until age 70 means raising that benefit to $2,232.
But you’ll need to live until age 82 1/2 to break even in both filing scenarios — in other words, to come away with the same amount of lifetime income. If you pass away before that age, you’ll end up shorting yourself on lifetime benefits by delaying your filing to age 70.
A nice middle-ground option
While you can clearly choose from a lot of different ages in the course of signing up for Social Security, FRA is really a nice middle-ground solution. That way, you’re not reducing your monthly benefit, but you’re also not waiting too long to start getting that money. And you may find that that’s a really nice compromise.
