Liz Weston

Dear Liz: I am 62. My friend (also 62) is considering when to take Social Security. She understands, from reading a finance book, that Social Security payments change only at 62, 66 and 70. She thinks if you don’t start at 62 when your benefit is, for example, $1,000, that it will stay $1,000 until age 66 when it bumps up to $1,400, or whatever. I thought that each month you delay would increase the payment you would receive. So if you get $1,000 at 62, you would get $1,005 at 62 and one month, $1,011 at 62 and two months, and so on. The Social Security site seems to support me. Can you clear this up for us?

Answer: You are correct. Your friend either misunderstood what she read or was unfortunate enough to find an author who didn’t know how Social Security works.

There are three important ages with Social Security: 62, the earliest you can begin retirement or spousal benefits; your full retirement age, which is currently 66 and rising to 67 for people born in 1960 and later; and 70, when your benefit maxes out.

Full retirement age is an important inflection point. Instead of having your checks reduced for an early start, you can begin earning delayed retirement credits that can boost your benefit by two-thirds of 1% each month, or 8% per year.

Full retirement age also marks the point at which Social Security benefits no longer are reduced if a recipient continues to work. Prior to full retirement age, benefits are reduced by $1 for every $2 earned over a certain limit ($16,920 in 2017). Also, those who started Social Security early have the option of suspending their benefits at full retirement age to allow them to begin growing again by earning delayed retirement credits. Those who suspend benefits can restart them at any time. Otherwise, suspended benefits will automatically restart at age 70.