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When a worker files for social security benefits, the Social Security Administration (SSA) reviews their work history, calculates contributions made via FICA taxes, adjusts for inflation, and determines the Primary Insurance Amount (PIA). This figure represents the monthly benefit amount available if the individual claims at their Full Retirement Age (FRA).
Individuals can choose to file as early as age 62, but doing so results in a permanent reduction in monthly benefits. Conversely, delaying filing until age 70 leads to increased benefits, accruing delayed retirement credits of 8% per year. For many, waiting until 70 seems the best strategy if they expect to live into their mid-80s, as the higher monthly payments eventually offset missed checks.