Ask the Expert: What are the pros and cons of starting Social Security in December 2023 vs. January 2024?
My full retirement age (FRA) was 66. I intended to postpone taking Social Security until I turn 70 next year, but I believe I’ll need to start a few months sooner. What are the pros or cons of starting Social Security in December 2023 vs. January 2024?
You can get an actual dollars and cents answer on a Social Security calculator online.
By postponing your Social Security application past your FRA, you’ve earned delayed retirement credits (DRCs). They increase your benefit by 8% a year for up to four years. The DRCs you earned in the year you start collecting Social Security aren’t reflected in your monthly check until the following January — so if you take Social Security in December 2023, the credits you earned in 2023 will be added to your check in January 2024.
DRCs accrue on a monthly basis at the rate of two-thirds (or 66.667%) of 1%. Let’s say your FRA benefit at age 66 was $2,000 a month, for example. If you postponed your application, it would grow about $13.33 a month. If you took Social Security at 66 and four months, you’d receive about $2,053. If you took it at 67, you’d receive $2,160. If you started at 70, you’d get $2,640 (plus any annual inflation adjustments.)
For real numbers, use the Social Security Retirement Estimator calculator. The calculator is linked to your actual earnings record. You can type in your own assumptions, changing the month in which you’ll file for Social Security, or increasing or reducing the number of your future work years at hypothetical salaries, to see how each scenario would affect your benefit.
The bottom line
You can find out online how filing for Social Security earlier or later would affect the size of your benefit check.
