“If you were born between 1943 and 1954, it was sometimes rough going squeezing into overcrowded housing, schools and colleges. But in terms of Social Security claiming choices, no one has it better than you,” writes Jeffrey Miller in an excellent martketwatch.com RetireMentors piece. Here are excerpts:
“The age at which workers born between 1943 and 1954 can receive full Social Security retirement benefits is 66. If workers delay claiming benefits until age 70, they are rewarded with a whopping 8% increase in benefits for each year delayed. Workers who are retiring now can get the 8% increase each year for four years. In an environment where interest rates are historically low, the 8% Delayed Retirement Benefit bonus is one of the very best bargains around.
“This boom time in Social Security claiming comes about because of changes in 2008. Before that time, the Delayed Retirement Benefits — the additional benefits that a worker receives each year he or she waits to claim between the full retirement age and age 70 — were smaller.
Those with a full retirement age of 66 also have available to them other strategies that mitigate some of the cost of delayed claiming of Social Security retirement benefits. By using a restricted application or file and suspend strategy, one member of a married couple or a divorcee can get a spousal benefit while waiting to claim their Delayed Retirement Benefits. In essence, the spousal benefit is a subsidy for delayed claiming.
“Younger workers have some of the same strategies available to them, but they won’t realize as great a benefit. Under present law the full retirement age is scheduled to increase in several stages until it reaches 67 for workers born in 1960 or later. The increase in the full retirement age will reduce the benefits that younger workers will receive since these workers will be able to take advantage of Delayed Retirement Benefits for a maximum of three years instead of older workers’ four years. In addition, the benefits that they will receive at each age between 62 and 70 will be smaller than they will be for workers that are now between the ages of 59 and 70.
“There have been discussions about changing the full retirement age to help bring the Social Security program into long term financial balance. But for the time being, it’s boom time for baby boomers. “