Delay Social Security, Increase Your Benefits

NEW BERLIN, Ill. (TheStreet) -- It's usually best, for most things in the financial world, to act now rather than wait around. The notable exception is in applying for Social Security benefits. We've discussed it before, but it is an important point that needs more emphasis. As you'll see from the table below, if you were born after 1943 (that's you, boomers!) you can increase the amount of your Social Security benefit by 8% for every year you delay getting benefits after your full retirement age.

If you are delaying your retirement beyond FRA, you'll increase the amount of benefit you are eligible to get. Depending upon your year of birth, this amount will be between 7% and 8% per year that you delay -- which can be an increase of as much as 32.5% if you delay until age 70 and were born in 1941, when your FRA is 65 years and eight months and the increase amount is 7.5% per year at that age. Look at the increase amounts per year based upon birth year:

So you can see the impact of delaying receipt of retirement benefits -- it can amount to more than 50% of the Primary Insurance Amount when you consider early benefits versus late benefits. Of course, by taking benefits later, you're forgoing receipt of some monthly benefit payments; given this, early in the game you'd be ahead in terms of total benefit received. This tends to go away as the break-even point is reached -- in your mid-70s to early 80s in most cases, which we'll review in a later article.