Nearly half of soon-to-be retirees say their biggest retirement question involves deciding when to begin claiming Social Security benefits, according to a survey from the Empower Institute.
The age you file for benefits will have a significant impact on your retirement, because it directly affects the size of your monthly payments. You can begin claiming Social Security as early as age 62, or you can wait a few years and collect larger checks each month. While there’s no one-size-fits-all answer as to what age you should begin claiming, there are a few good options to consider.
1. Age 62
Sixty-two is the most popular age to begin claiming Social Security benefits, according to a report from the Center for Retirement Research at Boston College, with 48% of women and 42% of men choosing to file at this age.
Although you’ll receive less money each month when you claim earlier, there are advantages to taking Social Security as soon as possible. For one, it can give you some extra spending money earlier in retirement. While you can retire early and then delay benefits, filing as soon as you retire means you won’t need to rely entirely on your savings to make ends meet.
In addition, claiming early is a wise choice if you think you may not live very long in retirement. Despite receiving smaller monthly payments, you will have more time to enjoy your money than if you’d delayed benefits.
2. Your full retirement age
Your full retirement age (FRA) is the age at which you’ll collect 100% of the benefit amount you’re entitled to. If you were born in 1960 or later, you have a FRA of 67 years old. If you were born before 1960, your FRA is either 66 or 66 and a few months, depending on the exact year you were born.
Claiming at your FRA can be a good compromise if you’re not sure whether you want to claim early or delay benefits. You’ll receive more each month than if you’d claimed earlier, but you won’t have to wait all the way until age 70 to start collecting benefits.
You may also choose to claim at your FRA if you plan to continue working after claiming benefits. If you claim before your FRA and you’re still working, your benefits could be reduced or even withheld entirely depending on your income. But once you reach your FRA, the Social Security Administration will not reduce your benefit amount regardless of how much you’re earning.
3. Age 70
By claiming retirement benefits at age 70, you’ll receive the largest possible monthly payment. If you have a FRA of 67 years old, you’ll collect your full benefit amount plus an additional 24% each month. Those with a FRA of 66 can expect an extra 32% each month in benefits by claiming at age 70.
If you’re speeding toward your senior years and your savings are looking sparse,the bigger checks you’ll receive by waiting until age 70 to claim can make it easier to afford retirement.
Additionally, if you expect to live a long lifespan, delaying benefits could result in receiving more money in total over your lifetime. While you may not be able to predict your life expectancy down to the year, if you’re in fantastic physical shape and have reason to believe you’ll likely live into your mid-80s or beyond, you could come out ahead by delaying benefits.
Which option is best for you?
The age you file for Social Security benefits will depend on your unique situation, so what’s best for someone else may not be the right choice for you. Consider factors such as how much you have saved in your retirement fund, your life expectancy, the age you want to retire, and whether you’ll continue to work after claiming benefits. From there, you’ll have a better idea of which option will help you enjoy retirement to the fullest.
