When should you start getting your Social Security checks? This is a complicated question to answer, as you have lots of choices. You could begin receiving benefits starting at age 62 but also get your first payment any time between 62 and 70.
The decision you make will affect your income as a retiree in profound ways in which you may not even be aware of. Therefore, you'll want to make the right choice about when to claim your benefits.
For many retirees, waiting as long as possible is actually the best approach -- and there are three big reasons why that's the case. Here's what they are.
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1. You can increase your monthly check amount
Social Security benefits are often a crucial support source, and many people rely on them more than they should. If you'll depend on your retirement checks to help cover important bills, getting a bigger monthly payment could be very important.
The good news is, delaying the start of your checks will allow you to raise the income you'll get. In fact, you can increase the amount significantly if you put off your first payment as long as possible.
There are two ways your checks could get bigger if you begin receiving them later. If you put off the start of your first payment from age 62 to your designated full retirement age (between 66 and four months and 67), you'll avoid early filing penalties that would otherwise reduce your payment. And if you wait beyond FRA until age 70, you'll earn delayed retirement credits that will increase your monthly check.
Early filing penalties can reduce the standard benefit (the amount you'd get at FRA) by up to 30% if your full retirement age is 67. Delayed retirement credits can increase your standard benefit by up to 24% with that same FRA.
This means that a retiree who'd receive a standard benefit of $1,500 at 67 would be able to increase their payment to $1,860 by starting it at 70. That's a whopping $810 more than they'd have received if they claimed at 62 and were hit with the maximum amount of early filing penalties, which would've shrunk their standard benefit to just $1,050 per month.
2. You can increase survivor benefits
Social Security doesn't just pay retirement benefits -- it also pays out survivor benefits. These enable a widow or widower to keep the higher of the two Social Security checks either spouse was receiving.
If you were the higher earner in your relationship, your monthly Social Security check would typically be larger than your spouse's. And if you wait to claim your benefits, you can supersize your retirement benefit and leave your partner with more money.
This can make all the difference in ensuring financial security. An early claim, on the other hand, could shrink the payment you get -- and thus the amount your spouse will end up with after you're gone.
3. You can maximize the chances of earning the most in lifetime benefits
When considering the right age at which to claim Social Security, you don't just want to think about monthly income. You should also consider how much money these benefits will provide over your entire retirement.
For the majority of retirees, a delayed Social Security claim will result in more lifetime income, with around 6 in 10 seniors ending up better off if they start their payments at 70. There's a simple reason for this.
When Social Security's system of early-filing penalties and delayed retirement credits was created, actuarial projections of life expectancies were used in its design. The goal was to equalize the amount of benefits a person received, regardless of when they started. Those who received smaller checks due to an early claim simply received more payments during their lifetimes, while people who delayed didn't get as many but each check was for more money.
Life expectancies are now longer than when Social Security was created. That makes it more likely that you'll outlive the break-even date beyond which waiting will result in paying you more money overall -- and you'll potentially continue to get even more money after meeting that milestone.
For all of these reasons, you should seriously consider putting off the start of your Social Security checks as long as you can -- ideally until age 70 -- so both you and your spouse can maximize your chances of ending up with more money in your later years.
