Here's how to decide on the best age to claim benefits.
Social Security is an integral source of retirement income for millions of older adults, and determining what age to begin taking benefits is one of the most important decisions you'll make.
Your full retirement age (FRA) is the age you become entitled to your full benefit amount based on your work history. This age varies by birth year, but it's 67 years old for everyone born in 1960 or later. You can also file earlier than your FRA, but you'll receive reduced payments.
The age at which you begin claiming will affect your monthly income for the rest of your life, so it's important to take this decision seriously. There are advantages to filing at both age 62 and age 67, and these three factors can help you decide which is the right move for you.
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1. The size of your retirement fund
No matter when you begin taking Social Security, it may be hard to survive on benefits alone in retirement. Most retirees, then, will need a sizable nest egg in addition to their monthly checks.
The average retired worker collects around $1,298 per month at age 62 and roughly $1,884 per month at age 67, according to data released by the Social Security Administration in December 2023. Even at age 70, the average payment is just over $2,000 per month.
If you have a robust retirement fund with hundreds of thousands of dollars or more in savings, you may not need to rely as much on Social Security. Claiming earlier may be more feasible, even if it means collecting smaller checks.
On the other hand, if money is going to be tight in retirement, delaying claiming by a few years can help boost your income. You'll collect up to 30% more in benefits at age 67 compared to age 62, which can amount to hundreds of dollars per month. If you have very little in savings, that extra money can go a long way.
2. Your priorities in retirement
The decision to claim at age 62 versus 67 will often come down to determining your biggest priority: Maximizing your income or retiring earlier.
Now, you don't necessarily have to take Social Security as soon as you retire. If you can swing it financially, you could retire at 62 and delay benefits by several years. Just keep in mind that you'll need to rely more heavily on other sources of income in the meantime, and it's easy to drain your savings too quickly if you're not careful.
For most people, then, retirement and Social Security go hand-in-hand. Claiming at 62 means taking a hefty benefit cut, but it can allow you to retire earlier. If you're battling health issues or simply want to spend as much time as possible in retirement (even if it involves making financial sacrifices), that could be a smart move.
For other retirees, though, maximizing monthly income is their main goal. This may be especially true if you expect to live a much longer-than-average lifespan. Social Security benefits are for life, and the larger checks you'll receive by delaying claiming can go a long way if your savings run dry decades into retirement. If financial security is your priority, delaying benefits may be the way to go.
3. Your strategy with your spouse
If you're married, it can be wise to create a strategy with your spouse to ensure Social Security is working for both of you.
This could mean strategizing when you'll both claim, if you're both entitled to benefits. For example, one of you may file at 62 to have some extra cash earlier in retirement, while the other waits until 67 or even 70 to take advantage of those larger checks.
If you have reason to believe one of you may significantly outlive the other, that could also play a part in your decision. When one spouse passes away, the other can sometimes receive the deceased person's entire benefit amount in survivors benefits. While this can be a bleak topic to think about, having one spouse delay benefits can help set the survivor up for larger checks when they may need them the most.
Social Security can make or break retirement for many older adults, and the age at which you claim can affect your payments by hundreds of dollars per month. While there's not necessarily a right or wrong time to claim benefits, when you take these three factors into account, you can make the best decision for your retirement.
