When to claim, how it's calculated, and the 8%-per-year return on delaying.
Your Social Security benefit is based on your highest 35 years of earnings, adjusted for wage inflation. If you worked fewer than 35 years, zeroes fill the gaps — meaning one more year of work in your 60s can replace a zero from your teens and increase your benefit. Your Primary Insurance Amount (PIA) is calculated at Full Retirement Age — 67 for most pre-retirees today.
Claiming at 62 permanently reduces your benefit by ~30%. Claiming at 70 permanently increases it by 24% above FRA. For every year you delay past FRA, you get an 8% credit — a guaranteed, inflation-adjusted return that's hard to beat with any investment. For most married couples, the higher earner should delay to 70 if possible, because that benefit also becomes the survivor benefit.
A non-working or lower-earning spouse can claim up to 50% of the higher earner's FRA benefit. When one spouse dies, the survivor keeps the larger of the two benefits — which is why maximizing the high earner's benefit matters. If you claim before FRA and keep working, the earnings test temporarily reduces your benefit if wages exceed the annual limit (~$23,400 in 2026).