When it comes to claiming Social Security benefits, timing can make a huge difference in the amount of money you receive each month — and over your lifetime. While many retirees consider collecting as soon as they reach eligibility at age 62, experts say the smartest, most financially rewarding age to start benefits is actually age 70. Delaying your Social Security benefits until 70 can increase your monthly payments substantially, offering a larger safety net for retirement.
What Is Full Retirement Age?
The Full Retirement Age (FRA) is the age at which you are entitled to receive your full Social Security benefits without any reductions. For people born in 1960 or later, the FRA is 67 years old. You can claim benefits as early as 62, but doing so means accepting a permanent reduction in your monthly checks.
For example, if your FRA benefit is $2,000 per month, claiming at 62 could reduce your payout by about 30%, bringing your monthly check down to roughly $1,400. On the other hand, waiting until your FRA means you receive the full $2,000 each month.
The Power of Delaying Benefits
One of the most valuable features of Social Security is the delayed retirement credits. For each year you delay collecting benefits beyond your FRA, your monthly payout increases by about 8%, up until you turn 70. This means if you wait from age 67 to 70, your benefits could increase by nearly 24%.
In the example above, if you wait until age 70 to start claiming, your monthly benefit would jump to around $2,480. This boost can add up significantly over time, especially for those who expect to live into their 80s or beyond.
Moreover, delayed benefits also improve survivor benefits for your spouse, which can be an important factor in household retirement planning.
Who Should Consider Claiming Early?
While waiting until 70 can maximize your monthly Social Security income, it’s not the best choice for everyone. Individuals with health issues, those who have a shorter life expectancy, or people who need income earlier due to financial necessity might benefit more from claiming sooner.
If you start collecting benefits before your FRA but continue working, keep in mind that your benefits might be temporarily reduced if your earnings exceed certain limits. These reductions stop once you reach FRA, and your benefits are recalculated to give you credit for months when payments were withheld.
How to Decide What’s Right for You
Deciding when to claim Social Security is a personal decision that depends on several factors, including your health, financial situation, life expectancy, and other retirement income sources. Using online calculators or consulting a financial planner can help you understand how different claiming ages might affect your lifetime benefits.
The Social Security Administration (SSA) provides resources and tools to help you plan your benefits, including a detailed calculator on their website to estimate payments at different ages.
Government Resources to Help You Plan
- The official Social Security website offers a comprehensive benefits calculator, personalized statements, and detailed information on claiming rules: www.ssa.gov
Key Takeaways
- Full Retirement Age (FRA) is 67 for those born in 1960 or later.
- Claiming Social Security before FRA reduces your monthly benefits permanently.
- Waiting to claim until age 70 increases your monthly payout by 8% per year after FRA, up to age 70.
- Delaying benefits can significantly increase lifetime income and improve survivor benefits.
- Individual circumstances like health and financial need should guide the timing of your claim.
Knowing the best time to collect Social Security benefits can greatly impact your retirement finances. For many, the strategy of waiting until age 70 offers the most financial benefit, but everyone’s situation is unique. It’s important to understand your options and use available resources to make the best decision for your future.