Maximizing Your Social Security: How Delaying Retirement Can Boost Your Lifetime Earnings

Why Working Past Your Full Retirement Age Makes Financial Sense

The decision of when to claim Social Security is one of the most consequential choices you’ll make in retirement planning. While the temptation to start benefits at 62 may be strong, there’s a compelling financial case for continuing to work until at least your full retirement age (FRA)—currently 67 for most people—or even longer. By staying in the workforce, you can significantly boost your monthly payments and create a more secure financial future for yourself and your family.

Strengthen Your Benefit Calculation by Replacing Low-Earning Years

Your Social Security benefit is calculated using your 35 highest-earning years, adjusted for inflation. Here’s where many people overlook a key opportunity: if you have gaps in your employment history, those zero-income years drag down your average substantially.

By continuing to work, you add new income records that the Social Security Administration updates annually. This allows you to replace those lower-earning years—or zero-income periods entirely—with your current, typically higher earnings. For individuals with incomplete work histories, this strategy alone can result in additional hundreds of dollars monthly. The exact boost depends on your specific earnings trajectory, but the potential gains are significant enough to merit serious consideration.

Protect Your Family’s Long-Term Financial Security

An often-overlooked advantage of delaying Social Security is the impact on survivor benefits available to your family members after your death. Unlike spousal benefits (which cap at 50% of your FRA benefit), survivor benefits for spouses and dependent children are calculated based on the retirement benefit you were actually receiving or eligible for at the time of your passing.

By postponing your claim until your FRA or beyond, you’re essentially locking in a higher survivor benefit amount for your loved ones. This becomes especially critical if you’re the primary financial provider for your family, as it ensures they’ll receive greater long-term support.

Eliminate the Early Claiming Penalty That Shrinks Benefits

Claiming before your FRA triggers a permanent early claiming penalty of up to 30%, which can reduce your lifetime benefits substantially. This penalty isn’t always the wrong choice—it may make sense if you have health concerns or insufficient savings to sustain yourself—but if your circumstances allow you to keep working, avoiding this penalty represents significant savings.

Alternatively, if you wait even beyond your FRA, your benefits continue growing at approximately 8% annually until age 70, when you become eligible for your maximum benefit. This delayed-claim credit compounds over time, substantially increasing your monthly payments.

Sidestep the Earnings Test Reduction

If you claim Social Security before reaching your FRA and continue working, the earnings test will reduce your payments temporarily. In 2025, the government withholds $1 for every $2 earned above $23,400 annually if you’re under your FRA all year; the threshold rises to $24,480 in 2026.

However, this isn’t a permanent loss. Social Security recalculates your benefit at your FRA to compensate for withheld amounts. Still, the net effect is typically less favorable than simply delaying your claim until your FRA, when the earnings test no longer applies. If you can sustain yourself through employment and savings until reaching your FRA, you’ll likely boost your lifetime Social Security income.

Making Your Decision

Ultimately, the timing of your Social Security claim should align with your personal circumstances, health outlook, and financial needs. While waiting until your FRA or beyond can substantially boost your retirement income, there’s no universally correct answer. Whether you delay a few years, a few months, or claim at 62, understanding the full implications of your choice ensures you’re making an informed financial decision that serves your long-term security.