The earliest age at which people are eligible to claim Social Security -- 62 -- remains one of the most popular. Doing so provides them with benefits for the longest possible period, and nets them the largest number of checks. But statistics say that most people would receive the largest possible lifetime benefit by not taking Social Security until they turn 70, when they would qualify for the biggest checks.
It's a conundrum for workers: Should they claim early to get the most checks, or should they delay and try to cover their near-term expenses with other funds in the hope of coming out ahead over the long term? Or should they compromise by picking a claiming age in the middle -- perhaps at what the government defines as their full retirement age (FRA)?
Your ideal solution will depend on your situation. But answering the two questions below can help you figure it out.
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1. What do you anticipate your financial situation being like at 62?
Delaying the date at which you claim Social Security can maximize your lifetime benefit, but it means you'll have to cover your expenses on your own for longer. This might be easy if you have a large nest egg or are still working at a steady job. But not everyone can do this.
The prospect of getting bigger Social Security checks in the future isn't worth it if delaying your application strains your finances right now. If you won't be able to keep a roof over your head without Social Security, your choice is pretty simple: Claim early, and use those monthly checks to help you maintain your financial security.
2. How long do you expect to live?
If it's financially feasible for you to delay taking Social Security, you can be more flexible. Your goal then is probably to maximize your lifetime benefit. Life expectancy is key here.
Those who don't expect to live past their 70s generally do better by claiming early, as it enables them to receive as many checks as possible. One risk of delaying your application date is that you might die before you start taking benefits, in which case, you'll get nothing from the program.
If you think you'll live into your 80s or beyond, though, there are advantages to delaying your application. The Social Security Administration increases the size of your checks for every month you put off claiming until you qualify for your maximum benefit at 70. The rates at which your checks grow will depend on your current age and your full retirement age (which for everyone who is not retired yet will be between 66 and 67, depending on your birth year).
The following table outlines how quickly Social Security checks increase over time for the two most common FRAs: 66 and 67.
|
Social Security Checks Grow By: |
FRA of 66 |
FRA of 67 |
|---|---|---|
|
5/12 of 1% per month (5% per year) from: |
62 to 63 |
62 to 64 |
|
5/9 of 1% per month (6.67% per year) from: |
63 to 66 |
64 to 67 |
|
2/3 of 1% per month (8% per year) from: |
66 to 70 |
67 to 70 |
Source: Social Security Administration.
Waiting just one month could raise the average $1,915 Social Security benefit (as of April 2024) by $8 to $13 per month. Delaying until you're 70 could add hundreds of dollars to your monthly benefit, but only you can decide if you're comfortable doing this.
Obviously, none of us know how long we'll live, but you may be able to get a rough idea based on your personal and family health histories. The average 62-year-old male today can expect to live until about 83.6 while the average 62-year-old female is projected to live until 86.4.
To determine which claiming age will net you the most money overall, you must estimate what kind of lifetime benefit each claiming age could give you. Start by creating a my Social Security account -- if you haven't already. After creating your login and answering some identity verification questions, you'll be able to access a tool that will let you see your estimated Social Security benefits at any claiming age you pick based on your work history to date. You can also adjust the future income projections it bases those figures on.
Choose a few claiming ages you're considering and multiply the monthly benefits from each of them by 12 to get your estimated annual benefit. For example, a $2,000 monthly benefit would give you a $24,000 annual benefit. Then, multiply this amount by the number of years you expect to claim Social Security. If you receive a $24,000 benefit for 20 years, that's a $480,000 lifetime benefit. Go with the age that offers the largest lifetime benefit whenever possible if you can afford to delay your application that long.
