When you're finally old enough to claim Social Security, you may not see any reason to delay your application. Claiming checks right away could improve your standard of living or maybe give you the money you need to finally retire.
But that doesn't mean signing up immediately is always your best move. Working even one more year before applying for benefits could lead to a much more comfortable retirement.
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Working one more year could eliminate a zero-income year from your benefit calculation
The effect that working one additional year has on your Social Security benefit depends in part on how much you earn during that year and how long your work history is. The Social Security Administration focuses on your 35 highest-earning years, adjusted for inflation, when calculating your benefit.
When you haven't worked that long, it includes zero-income years in the calculation. Even one can drop your monthly benefit by several dollars. So if you have a short work history, working one more year is an opportunity to replace a zero-income year with a year of actual income.
Let's say you've worked 34 years and earned $60,000, adjusted for inflation, each year. The Social Security Administration will total your income from all 34 years -- $2.04 million -- and divide it by 420 (the number of months in 35 years) to get your average indexed monthly earnings (AIME). In this case, that's about $4,857.
Then, it applies the appropriate Social Security benefit formula to your AIME. Here's what that looks like for the 2026 benefit formula:
- Multiply the first $1,286 of your AIME by 90%.
- Multiply any amount between $1,286 and $7,749 by 32%.
- Multiply any amount over $7,749 by 15%.
- Total your results from the three steps above.
This is your primary insurance amount (PIA). In our example, your PIA would be about $2,300. That's not bad. But it could be better if you worked another year.
Assuming you earned about $60,000 per year again, your AIME would jump to $5,000 per month. And your PIA would climb to about $2,346 per month.
Working longer could also help you delay your Social Security application
You qualify for your PIA at your full retirement age (FRA). This is 67 for most workers today. When you apply at a different age, the Social Security Administration adjusts your benefit up or down accordingly.
Early claimers get smaller checks. Specifically, they lose five-ninths of 1% per month for up to 36 months of early claiming, then five-twelfths of 1% per month thereafter. That means those who apply immediately at 62 only get 70% of their PIA per month. However, if they wait until 63 to apply, they'll get 75% of their PIA per month.
Continuing our example from above, if you originally planned to claim checks at 62 but you only had a 34-year work history, you'd get 70% of your $2,300 PIA, or $1,610 per month. But if you worked and delayed Social Security until 63, your PIA would jump to $2,346 per month, and you'd get 75% of it, or about $1,760 per month.
The longer you wait to apply, the faster your checks grow. And this doesn't stop once you reach your FRA. Your checks continue to grow by two-thirds of 1% per month beyond this point until you qualify for your largest checks at 70. Then, you'll receive 124% of your PIA per month if your FRA is 67.
When to claim is ultimately your call
None of this is to say you have to wait longer to sign up for Social Security. If you can't afford to wait, for example, and you need your checks now to pay your bills, signing up earlier makes sense.
But if you can afford to put off your application a bit longer, doing so could lead to a much larger monthly benefit. This could, in turn, lead to more money over your lifetime, depending on your life expectancy.
