There are countless decisions to make as you inch closer to retirement, and choosing when to take Social Security is one of the most important. The age at which you file will directly affect your benefit amount, sometimes by several hundred dollars per month.
Your full retirement age (FRA) is the age at which you’ll receive 100% of the benefit you’re owed based on your work history. Your exact FRA will depend on your birth year, but it’s age 67 for everyone born in 1960 or later.
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It’s possible to file before or after your FRA, but it will affect your benefits. Claim as early as possible at age 62, and your benefits will be permanently reduced by up to 30%. Delay past your FRA (up to age 70), and you’ll receive your full benefit plus a bonus that increases each month until you reach 70, at which point it will be a 24% bonus.
Choosing the right age to claim can be confusing, and if it seems like there’s a lot of conflicting advice about the best time to file, that’s because there is. The age when you should take Social Security will depend largely on your unique situation, so there’s not necessarily a one-size-fits-all answer.
That said, research suggests that there could be an ideal age for the majority of people to begin taking benefits — and it could boost the average retiree’s income by more than $100,000 over time.
The best time to take Social Security, according to data
In 2019, researchers at the financial planner United Income studied retirees’ Social Security claiming decisions. They then examined those participants’ income throughout the rest of retirement. They used that data to determine how many retirees claimed benefits at the optimal age to maximize their lifetime income.
They found that only 4% of retirees file at the optimal age, and the average retired household will miss out on around $111,000 in lifetime income by claiming at the less-than-ideal time.
More than 70% of retirees file for Social Security before age 64, according to the study, yet that was the ideal age to claim for only around 6.5% of retirees. On the other hand, while only 4% of retirees waited until age 70 to claim, around 57% of study participants could have earned more over a lifetime by filing at that age.
According to the data, then, the majority of older adults could earn more over a lifetime by waiting until 70 to file, while claiming at ages 62 or 63 could be among the worst, financially, to take benefits.
One crucial caveat
Although the data points to 70 as being the best to take benefits, it’s important to note that this research is based solely on the financial side of Social Security. But when deciding when to claim, there’s more to consider than just finances.
For example, it’s wise to factor in your health and potential lifespan. While this isn’t the most pleasant topic to think about, if you’re battling health issues or have reason to believe you might not live well into your 70s or beyond, claiming early could give you more time to enjoy your benefits.
And some people don’t have the luxury of choosing when to retire. If you lose your job or can no longer work, it can be smart to start taking Social Security immediately. Although you can retire in your early 60s and delay benefits until 70, you’ll need to rely on other sources of income in the meantime — which risks draining your savings too quickly.
According to the data, 70 is the best age to take benefits for the majority of people — at least when it comes to maximizing their income. But Social Security is more complicated than that, and by examining the big picture before you file, you can decide on the best age for your unique situation.
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