Social Security can make or break retirement for millions of older adults, and the age you file for benefits is one of the most important decisions affecting the size of your checks.
Filing at your full retirement age will earn you 100% of your benefit based on your work history. By claiming as early as possible at 62, your monthly payment will be permanently reduced by up to 30%, while delaying until 70 will result in a bonus of at least 24% on top of your full benefit.
There are many factors to consider when deciding on a claiming age. While there's no single best choice for all situations, research suggests that when it comes to finances, claiming at one particular age could boost your lifetime income by hundreds of thousands of dollars.
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Supercharging your retirement income
Most older adults take Social Security sooner rather than later. In fact, around one-quarter of men and women claim benefits at 62, according to 2023 data from the Social Security Administration, while less than 10% wait until age 70.
However, research suggests that those who file before age 70 could be leaving hundreds of thousands of dollars on the table. In a 2019 study from United Income, researchers used data from the Social Security Administration to examine the relationship between filing age and total lifetime income among retirees. They found that, collectively, retirees miss out on around $3.4 trillion in income by filing at the suboptimal age -- or around $111,000 per household.
They also found that around 57% of retirees could generate more wealth over a lifetime by filing for benefits at age 70. By comparison, only 6.5% would collect more in total by claiming before age 64.
A separate study from the National Bureau of Economic Research found even more striking results. These researchers determined that 91.6% of older adults could maximize their lifetime income by filing at 70. Furthermore, the median household could increase their lifetime wealth by around $158,069 by filing at the ideal age.
Delaying benefits isn't for everyone
Despite the overwhelming data suggesting that age 70 is the best age to file for Social Security, it's important to look beyond finances when making this decision. Factors like your overall health, life expectancy, and general retirement goals should also factor into the age you file.
If you have reason to believe you won't live well into your 70s or beyond, you might collect more over a lifetime by taking benefits earlier. For many people, the Social Security break-even point -- or the age at which you receive the same amount in total lifetime benefits, regardless of whether you filed early or delayed -- is in their late 70s or early 80s.
If your life expectancy falls below your break-even age, you could receive more benefits in total by claiming early. But if you live a much longer-than-average lifespan, you could collect more overall if you delay.
Personal preferences will also play a role in your claiming decision. For some people, retiring as early as possible is the most important goal -- even if it means making financial sacrifices. Spending a few extra years in retirement when you're younger and healthier can be priceless, and filing for benefits sooner can make early retirement more feasible.
When it comes to optimizing your finances, filing at age 70 is often the best approach to earn as much as possible. But it's not the only factor to consider, and prioritizing your goals can help you make the best decision for your retirement.
