If a single person begins to collect benefits at age 62 but doesn’t retire until age 66, he or she can receive about 75% of the primary insurance amount (PIA).
 
Waiting until age 70 to begin collecting benefits increases that to 132% of PIA. That’s thanks to the extra four years (from 66 to 70) of delayed retirement credits paying 8% per year.
 
To be able to wait until age 70, a single person would have to live until at least 80. That’s the breakeven point that makes waiting worthwhile.
 
But assumptions that the break-even age increases steadily for each year delayed are not accurate. The way benefits are calculated yields more uneven results.
 
This means that there is a period during which benefits should not be collected. There are multiple gaps when retirement benefits should not be claimed.
  • Between ages 62 and one month and 63 and 11 months
  • Between ages 65 and five months and age 66 and seven months
This means that the normal retirement age is right in the middle of one of those gaps. Since there is no partner whose benefits may close that gap for a single person, retiring and claiming benefits at age 66 should be avoided.
 
There are software programs that help in calculating ways to maximize benefits. For couples, one program is Social Security Timing. For singles, there is Maximize My Social Security.
 
Social Security Explorer is a new program by Impact Technologies Group, which offers strategies for various types of beneficiaries.
 
Over 2013, Franklin will compare these programs in terms of cost, ease-of-use, and consistency of results. A4A will keep you up to date as these comparisons are made.

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