You know you can start taking social security at 62 but then hear a juicy incentive. Wait until you’re 65 to retire and you’ll get an extra $227 a month.
Employers and workers pay a certain percentage of your income into a social security trust fund. For those payments, you earn the right to a monthly benefit when you start collecting later in life.
Once you start collecting social security, you receive a fixed amount every month for as long as you live. That fixed amount currently averages $1,360 a month for people that wait until their full benefit age.
An extra $200 a month from age 65 to 85 means a payout of nearly $50,000! That’s awfully tempting, especially for someone that can start withdrawing money from investments to cover living expenses.
Someone waiting to collect benefits at 65 years of age would receive an additional $2,725 a year in benefits.
If they lived to 80 years old, that would mean an additional $43,600 in exchange for giving up the $11,424 a year they would have collected those first three years after 62 years of age.