What are delayed retirement credits and how do they work?

Delayed retirement credits are the financial reward Social Security gives you for putting off claiming your retirement benefit. Credits start accumulating the month you reach your full retirement age, or FRA, which is 66 and 10 months for people born in 1959 and 67 for people born in 1960 or later.

For every month from your FRA until age 70 that you postpone filing for benefits, Social Security increases your eventual benefit by two-thirds of 1 percent — a total of 8 percent for each year you wait. For example, wage earners who reach full retirement age at 67 but delay claiming benefits until 70 will get an extra 24 percent tacked on to their monthly payment.

The credits stop accruing when you reach 70. You can file for Social Security later than that, but doing so won’t increase your monthly benefit.

When does the benefit boost kick in?

It depends on your age when you claim Social Security. If you file after FRA but before age 70, your delayed retirement credits are not applied to your payment right away; they are added in January of the year after you start getting benefits. If you wait until you turn 70, you get all your credits right from your first payment.

If you are already drawing retirement benefits but want to up your future payments (and can afford to temporarily go without your current ones), you can direct Social Security to suspend your benefits. During the suspension period, you will collect the credits just as if you’d never filed. This option is available between FRA and age 70.