Choosing when to start taking Social Security is a major decision that will impact your monthly income for the rest of your life.
You can file for benefits any time after you turn 62 years old, but for every month you wait, you’ll earn slightly larger checks. Wait until age 70 to file, and you’ll receive your full benefit amount plus at least 24% extra every month for the rest of your life.
There are pros and cons to claiming at each age, but research shows there’s a clear winner when it comes to making the most of your money. However, there is an important catch.
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The best age to take Social Security
In 2019, researchers at United Income studied retirees’ claiming decisions and the amount they collected in benefits over a lifetime. They then used this data to determine how many retirees made the “optimal” decision in order to maximize their lifetime income.
They found that claiming at age 62 or 63 was the optimal decision for only 6.5% of retirees. Meanwhile, 57% of the participants could have earned more over a lifetime if they’d waited until age 70 to file for benefits.
Researchers also found that the average household misses out on around $68,000 worth of benefits by making a less-than-optimal claiming decision. In addition, poverty among seniors would be cut in half if all retirees filed at the optimal age, the report revealed.
If you want to earn as much as possible from Social Security, then, this data suggests that waiting until age 70 could potentially be far more lucrative than claiming early.
The case for still claiming early
On paper, waiting until age 70 to take Social Security makes the most sense. You could collect hundreds of dollars more per month compared to filing early, and if your savings are falling short, this money could go a very long way.
That said, your claiming decision involves more than just finances. For some people, there are other factors that are just as important to consider.
For example, maybe you’re battling health issues and have reason to believe you may not spend several decades in retirement. In that case, waiting until age 70 to claim Social Security may not make sense — and you might actually collect more over a lifetime by filing early.
Even if you’re in tip-top shape, perhaps you simply want to retire early so you don’t have to bet on your longevity. Life can throw plenty of curveballs, and if you develop health issues in your late 60s or early 70s, you could regret not filing earlier.
Finally, maybe enjoying a longer retirement is more important to you than maximizing your monthly income. You don’t have to retire and take Social Security at the same time, but claiming early often makes it easier to retire early, too. While you will receive smaller checks, sometimes that’s a worthwhile sacrifice for a few extra years in retirement.
When should you take Social Security?
The age you begin claiming benefits is a highly personal decision, so there’s not necessarily a right or wrong answer. The best choice for you will depend on your priorities in retirement.
If your main goal is to maximize your monthly income, waiting until age 70 may be your best bet. That extra money can go a long way, and if you’re struggling to save, delaying benefits can make retirement far more comfortable.
On the other hand, if you have a robust nest egg or are willing to cut back in retirement, maximizing your benefits may not be your biggest priority. As long as you’re aware of how filing early will affect your monthly checks, there’s absolutely nothing wrong with taking benefits as soon as age 62.
While statistics may suggest that waiting until age 70 to take Social Security is the best option, it won’t be the right choice for everyone. By examining your priorities and looking at the big picture, it will be easier to decide on the best age for your situation.
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