"Social Security benefits are based on workers' lifetime earnings. Specifically, the Social Security Administration takes workers' 35 most profitable years of wages into account when calculating their retirement benefits. In that formula, earlier wages are adjusted for inflation. But the filing age boomers choose for claiming Social Security also helps determine how much money they receive each month. The earliest possible filing age is 62. Full retirement age (FRA), meanwhile, is when recipients can collect their Social Security checks each month without a reduction."
"For younger boomers, FRA is 67. There's also the option to delay Social Security past FRA for boosted checks, up until age 70. As many of the youngest baby boomers today become eligible for Social Security, they're going to have to decide when to sign up for those monthly benefits. And it's important to look at that decision from all angles."
Social Security benefits are calculated from a worker's 35 most profitable years of wages, with earlier wages adjusted for inflation. The filing age determines monthly benefit amounts, with the earliest possible filing at 62 and full retirement age (FRA) at 67 for younger boomers. Benefits can be increased by delaying claims past FRA up to age 70. Filing before FRA reduces monthly payments, though earlier receipt might suit some financial goals. Social Security can be the only guaranteed lifetime retirement income, so timing claims requires careful evaluation of monthly payouts, lifetime income, and peace of mind.
Read at 24/7 Wall St.
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