If you withdraw at age 62, your Social Security monthly benefit is permanently reduced. If you wait until after full retirement age to retire, you earn delayed retirement credits that can increase the size of your monthly check from Social Security by two-thirds of a percent each month. This has been in place for years, but 2020 is the last year to get the highest benefit of the retirement credits. After 2020, the amount of retirement credits that could be potentially earned will decrease as the full retirement age will increase by two months until 2026 when the retirement age tops off at 67 years of age. In 2020, the full retirement age is 66 years old and so waiting until 70 years old to earn 4 years of delayed retirement credits would increase your monthly benefits by 32%. In 2026, the full retirement age will be 67 years old and so waiting until 70 years old will earn you 3 years of retirement credit meaning only a 24% increase in your monthly benefits. So for example, in 2020 if the regular benefit was $1,500 at the full retirement age of 66 years old, waiting until 70 to take benefits would increase your monthly benefits to $1,980 a month. Also for example, in 2026 if the regular benefit for full retirement age at 67 years old was $1500, waiting until 70 to take benefits would increase your monthly benefits to only $1,860 a month. What does the future hold after 2026? Nobody knows, but it is believed that the full retirement age could rise in the years to come meaning that waiting until 70 years old to take benefits would not earn as much as they would have in earlier years.
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