Social Security

What Is It

Social Security is a government-run retirement benefit funded by payroll taxes throughout your working life, paying you a monthly income starting as early as 62. Your benefit is based on your 35 highest-earning years, and the age you choose to start claiming permanently changes the monthly amount — there’s no way to “catch up” later by claiming a higher rate retroactively.

Why It Matters

Claim at 62 (the earliest possible age) and your benefit is permanently reduced compared to your full retirement age amount. Wait until 70 instead, and you get a permanently larger check — roughly 8% more for each year you delay past full retirement age, up until 70, where the increases stop. This is one of the few genuinely guaranteed, inflation-adjusted income sources most retirees have, which makes the claiming-age decision worth real thought rather than defaulting to the earliest option.

Quick Example

Someone entitled to $2,000/month at their full retirement age gets roughly $1,400/month if they claim at 62 instead — a permanent 30% cut. Wait until 70, and that same benefit grows to roughly $2,480/month — the gap between claiming earliest and claiming latest is over $1,000 a month, for life.

Which age actually wins depends entirely on how long you live — see how the lead changes:

Try It Yourself

See how your Social Security claiming age interacts with the rest of your retirement income timeline.

Related Concepts