Americans who are planning for their retirement can get bigger Social Security benefit checks by delaying their application for benefits until after they reach full retirement age.
The monthly benefit payments to Social Security beneficiaries are determined based on their full retirement age (FRA), which varies based on the year a worker was born.
For workers born in 1960 and after, the FRA is 67, while the FRA is reduced by two months for each year before 1960 until it reaches 66, which is the FRA for those born from 1943 to 1954.
Those who want to continue working beyond their FRA and choose to delay claiming their Social Security benefits can incrementally increase their monthly benefits by continuing to work, with benefits increasing by 8% per year until they reach age 70, when the benefit is maximized.
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Workers can claim Social Security benefits as early as age 62, though they have their benefit amount reduced.
For example, a person whose FRA is 67 and claims early when turning 62 would see the monthly benefit reduced 30%, lowering every $1,000 in benefits to $700. It would also affect their spouse's benefit by 35%, reducing $500 in benefits to $325.
Those who are receiving Social Security benefits and have reached their FRA can choose to suspend their payments temporarily or until they reach age 70, when they will automatically resume.
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Benefit amounts resume their annual growth during the period that the beneficiary has suspended benefits, which can allow them to receive larger benefit checks than they received before the pause once benefits are resumed.
While a beneficiary has suspended their benefits, their future monthly benefits grow at a rate of about 8% per year, or 0.666% on a monthly basis.
Married couples should be aware that voluntarily suspending Social Security benefits also suspends spousal benefits, which are up to 50% of the spouse's benefits unless they're divorced.
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Beneficiaries who suspended their benefits may request the resumption of their benefits before they turn 70, when they automatically begin again.
Suspending benefits also means that Medicare premiums cannot be deducted from Social Security benefits, which means the beneficiary would be billed by the Centers for Medicare & Medicaid Services.
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