What You Need to Know

• The benefit retirees get for delaying their Social Security claim does not increase at a consistent rate; it rises in steps.
• The benefit of claiming after step years is much larger than other years.
• This strategy is particularly valuable for women.

The bonus retirees get from waiting to claim Social Security income benefits increases in two steps. These steps, originally created as a shortcut to simplify benefit calculations, result in differences as high as $10,000 in the incremental value of waiting an additional year to reach each new step.

Claiming before the valuable step-years can be a costly mistake. Workers who claim at full retirement age lose a significant amount of wealth by not taking advantage of the most valuable 8% one-year step increase.

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