The Social Security program, which in the United States has been managed at the federal level for decades by the Social Security Administration (SSA), establishes that retirement benefits depend on two central factors: work history and full retirement age (FRA). By 2025, those who plan to retire at age 67 will face variations in amounts based on their year of birth, inflation adjustments, and late retirement credits.
The FRA—minimum age to receive 100% of the benefit—is 66 years and 8 months for those beneficiaries who were born from 1958 onwards. This means that retiring at 67 in 2025 implies a delay of four months, generating an increase of 2.67% in the monthly amount. The calculation is based on the additional 0.6667% per month after FRA.
The maximum Social Security payment is not the same for everyone: the different reasons
According to the most up-to-date data from the SSA, the maximum benefit for those who decide to claim their benefits in their FRA is $4,018 per month. However, this figure only applies to people born in 1960 or later. For those born in 1958, the maximum monthly benefit is calculated at $3,924, taking into account adjustments for delayed retirement.
To receive the maximum Social Security benefit, a 35-year work history with earnings in the maximum taxable bracket is required, which is currently $168,600 annually. The formula used by the SSA combines indexed wages and applies a cost of living adjustment (COLA). By 2025, this adjustment will be 2.5%, which will increase monthly benefits from approximately $1,927 to $1,976, as we were able to extract from SSA documents.
People who delay retirement beyond full retirement age (FRA) accumulate late retirement credits, which increase their monthly benefit amount. For example, someone born in January 1958 reaches their FRA in September 2024. If they decide to retire in January 2025, they would receive $3,924 per month, instead of the $3,822 cap for 2024. This difference is due to a 2.67% increase from waiting an additional four months to start collecting.
Let’s look at an example: Social Security increases for each year of waiting
Consider George, an American worker (imaginary, for instance only) who is evaluating when to start receiving his Social Security benefits. If you decide to retire at age 62, which is the minimum age allowed, you would receive $1,500 a month. However, that amount represents a reduced benefit, since he is collecting before his Full Retirement Age (FRA), which for him would be age 67 if he was born in 1960 or later.
If George decides to wait a year and retires at 63, his monthly payment would increase to approximately $1,608, a 7.2% increase from the initial amount. If you wait until age 64, the benefit would grow again, this time to about $1,716 per month. At 65, your payment would reach $1,824, and if you retire at 66, you would receive about $1,932 a month.
Once George turns 67, he can receive the full benefit, without cuts, of approximately $2,040 per month. But if you decide to continue working and postpone retirement, you will continue to accumulate deferred retirement credits, which increase your benefit by an additional 8% for each year you wait, up to a maximum of age 70.
Thus, if George retires at age 68, he would receive about $2,203 a month, at age 69 he would receive about $2,367, and if he waits until age 70, his monthly payment would be $2,530, the maximum possible benefit in his case. This amount represents 68% more than if he had started collecting at age 62.