Social Security and Your Retirement

Social Security is part of a government-run social welfare and insurance program. Typically, people who claim Social Security benefits are retirees aged 62 or older, who have worked for a qualifying number of years.

  • The average monthly Social Security benefit for retirees is $1,400.1
  • Over half of Americans (57%) begin taking benefits before reaching full retirement age.2

Many people have questions concerning two major later-life decisions: when to retire and when to start collecting their Social Security benefits.

  • Will my benefits be lower if I start taking them before my full retirement age?
  • If I stop working at age 65 but don’t collect benefits until age 70, will my benefits be higher than if I collect them right away?
  • What happens if I start taking my benefits while continuing to work?
  • Can I increase my benefits by working longer?

Understanding your options, such as when to begin taking your benefits, will help you make important decisions at all stages of your retirement.

Keep reading for important information about the role Social Security plays in your retirement, so you can make smart, informed decisions.

Your Social Security options

For most people, Social Security represents a significant source of guaranteed retirement income. That’s why it’s important for consumers to understand how much they’ll receive from Social Security and when to begin taking benefits.

When to start collecting benefits: Understand how full retirement age figures into your benefits

What is full retirement age and why is it important? You will be eligible for 100% of your Social Security retirement benefits at your full retirement age.

Keep in mind that taking your benefits earlier or later than your full retirement age can add up to a significant reduction or increase in your monthly benefit amount.

Full retirement age for people born in:

  • 1943-1954: age 66
  • 1955-1959: between ages 66-67 years
  • 1960 or later: 67 years

Percent of Social Security Benefit Received3
Assuming full retirement age is 67

Why you should wait to collect, if you can.

People can begin receiving Social Security retirement benefits at age 62.

If you take your Social Security benefits early…

Your monthly benefit will be lower than 100% of the benefit you’d receive if you’d waited until your full retirement.

For example, if your full retirement benefit is $1,500 per month, assuming full retirement age is 67:

  • Scenario #1: If you begin collecting benefits at age 62, your benefit will be 30% lower ($1,050).
  • Scenario #2: If you begin collecting at age 65, your benefit will be 13.33% lower than if you’d waited two years. That adds up to a loss of almost $48,000 over 20 years.

If you take your Social Security benefits later…

Your monthly benefit will be higher than 100% of the benefit if you delay taking your benefits until after your full retirement age.

For example, if you full retirement benefit is $2,000 per month, assuming full retirement age is 67:

  • Scenario #1: If you begin collecting benefits at age 68, you’ll receive and additional $160 per month, that’s 108% total per month.
  • Scenario #2: If you delay collecting benefits until age 70, you’ll receive the maximum Social Security pay out of $2,480 per month (124%).

Consider longevity

People today are living longer than ever before. According to data from the Social Security Administration, a man reaching age 65 today can expect to live, on average, until age 84; a woman turning 65 today can expect to live, on average, until age 86.5.5

Maximize your benefits

Working longer and delaying when you begin taking Social Security benefits can maximize the amount of your monthly benefit checks. Here are five ways you can get the most out of your Social Security benefits.

Tip #1: Postpone taking your Social Security benefits

Why? The most popular age for people to start taking their Social Security benefit is 622 but you can increase your monthly benefit by waiting. Your benefits will grow every year you delay taking your benefits until age 70. For example, your monthly Social Security checks will be 76% higher if you begin taking them at age 70 than if you take them at age 62.

Tip #2: Work at least 35 years

Why? The Social Security Administration calculates your benefit by totaling your earnings during your highest 35 years of working and averaging them. If you work fewer than 35 years, each year you don’t work will count as zero—lowering your lifetime average.

Tip #3: Maximize your income every year until full retirement age

Why? In general, the more you earn each year, the higher your benefit, although the Social Security Administration excludes earnings above the annual cap in their calculations ($132,900 in 20193) Therefore, make the most out of your peak earning years instead of scaling back before full retirement age.

Tip #4: Carefully review tax rules concerning your Social Security benefit

Why? Depending on your income and your state, your taxes might take a large bite out of your Social Security benefit. There are 13 states that can collect taxes for Social Security benefits; you might consider moving to a more tax-friendly state for retirees.

Tip #5: Born in 1953 or earlier and married? Claim spousal benefits at 66 then switch to the other spouse’s higher benefit at age 70

Why? Take advantage of receiving some benefits now while growing benefits to take later. If both spouses are full retirement age*, you can claim one spouse’s benefits now, then switch to the other spouse’s benefits at age 70 when the monthly checks will be higher.

Talk to a representative to understand your options

Important decisions require a thoughtful approach.

People don’t always know all the different considerations to take when weighing their Social Security options. And these decisions can mean a difference of hundreds of thousands of dollars in lifetime benefits for a single person.

When facing important decisions that will have lasting consequences on your financial security during retirement, it’s important to understand your options.

Let Bankers Life help you think through your options, answer your questions and help you take full advantage of all your benefits. Get started by contacting us here.


*This option is only available to people born in 1953 or earlier.
1Business Insider, The states where people get the most money from Social Security, ranked,  April 23, 2018.
2USA Today, What’s the most popular age to take Social Security? A Foolish Take, June 19, 2018.
3Social Security Administration,


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