Social Security retirement benefits represent one of the most significant financial assets for most Americans—the average retiree receives $1,907 per month ($22,884 annually) as of 2025, and over a 20-year retirement, that totals $457,680 in inflation-adjusted income.

Yet most people claim benefits without understanding the strategic decisions that could increase their lifetime benefits by $100,000 or more.

Your benefit amount is based on your 35 highest-earning years indexed for inflation, with higher earners receiving higher benefits (but not proportionally—the formula is progressive).

You become eligible for benefits at age 62, but claiming early results in permanently reduced benefits: claiming at 62 instead of Full Retirement Age (FRA, currently 67 for those born 1960 or later) reduces your benefit by 30%.

Conversely, delaying benefits past FRA increases your benefit by 8% per year until age 70—a guaranteed 8% return unmatched by any risk-free investment.

For someone with a $2,000 FRA benefit, waiting until 70 increases it to $2,480 (24% higher), resulting in an extra $5,760 annually, or $115,200 over 20 years.

The claiming decision involves multiple factors: life expectancy (longer-lived people benefit more from delaying), financial need (if you need income now, claiming early makes sense), spousal coordination (married couples can optimize by having one spouse delay), and employment status (if you claim before FRA while still working, benefits are reduced $1 for every $2 earned above $22,320).

Spousal benefits allow a lower-earning spouse to claim up to 50% of the higher earner's FRA benefit, and survivor benefits provide 100% of the deceased spouse's benefit (including delayed retirement credits) to the surviving spouse—this creates powerful planning opportunities where the higher earner delays to maximize the survivor benefit.

The file-and-suspend and restricted application strategies were largely eliminated in 2015, but grandfathered exceptions still exist for those born before 1954.

Common mistakes include claiming too early without considering longevity, not coordinating with a spouse's benefits, continuing to work while claiming early (triggering earnings penalties), and not understanding how benefits are taxed (up to 85% of benefits can be taxable depending on provisional income).