If I Could Tell All Retirees 1 Thing About Social Security, I'd Say to Do This Before You Claim Benefits

Core Insights - Social Security is a crucial social program in America, with many components that can complicate understanding [1] - Understanding the full retirement age (FRA) is essential for retirees as it significantly impacts their benefits [2] Benefit Calculation - Monthly benefits are determined by the timing of claims relative to the FRA, with the primary insurance amount (PIA) being the base benefit received at FRA [4] - Claiming benefits before the FRA results in a permanent reduction, with a decrease of 5/9 of 1% for the first 36 months and 5/12 of 1% for each additional month [5] - For example, claiming at age 64 (FRA 67) results in a 20% reduction, lowering a $2,000 PIA to $1,600, while claiming at 62 results in a 30% reduction to $1,400 [5] Delayed Benefits - Delaying benefits past the FRA increases the monthly amount by 2/3 of 1% per month, equating to an 8% annual increase until age 70 [6] - Continuing the previous example, delaying benefits until age 70 would increase the amount to $2,480, a 24% increase from the original PIA [6] Spousal Benefits - Claiming spousal benefits is also affected by the timing of the claim relative to the FRA, with reductions of 25/36 of 1% for up to 36 months and 5/12 of 1% for additional months [9] - For a person with an FRA of 67, claiming spousal benefits at 64 results in a 25% reduction, while claiming at 62 results in a 35% reduction [10]