3 Reasons It’s Dumb to Take Social Security Benefits at 67

67 is the Social Security full retirement age for anyone born after 1959, but it might not be the best age to take your benefit.

Jason Hall
Jason Hall, Selena Maranjian, and Dan Caplinger
Dec 5, 2015 at 6:18PM
Investment Planning

If you were born in 1960 or after, then 67 is your Social Security "full retirement age." This is when you get the "full" retirement benefit. However, there's a pretty broad range of ages in which people are eligible to start receiving payments. Most people can take their benefit as early as 62, though at a nearly 30% lower monthly payment, or as late as 70, with a 24% boost in their checks for delaying their retirement benefit. 

What's the right age for you? Well, that depends on your situation and a number of factors. Over the past several weeks we've asked a number of our top retirement and investment planning contributors to give us their thoughts, and we've gotten a lot of good stuff, such as why you should take benefits at 62, some reasons why you should not take benefits at 62, and even some reasons why you should wait until 70 before getting that monthly check. 

This time around, we take a look at some reasons why 67 might not be the right age for you. Let's take a closer look. 

Waiting longer means more monthly income
Selena Maranjian: A key reason to think twice about starting your Social Security benefits at age 67 is this: By delaying, you can make your monthly checks bigger -- and potentially much bigger. Let's assume that your normal, or "full" retirement age, per the Social Security Administration is 67. That's the case for all of us born in 1960 or later.

If you were born in 1943 or later, you will see your benefits increase by about 8% for each year that you delay after your full retirement age -- up to age 70. So, if that age is 67 and you delay starting to receive your benefits until age 70, your benefits will be about 24% heftier. Consider that as of September 2015, the average Social Security benefit was $1,338 per month, or about $16,000 per year. A 24% bigger check would be $1,659, or about $19,900 per year -- a meaningfully larger sum. Keep in mind, too, that those are just average numbers. If you earned above-average income during your working life, your monthly checks will be above average, too -- and by waiting you can make them even bigger.

Not everyone can delay starting to receive their benefits. We all have different sums socked away to live off of in retirement, and some people end up having to stop working earlier than they planned, due to illness or downsizing. If you can wait, though, it can be worth it to do so.

Sometimes taking your benefit earlier is smarter
Jason Hall: As Selena points out, waiting to age 70, when your Social Security benefit reaches its max level, means a much bigger check versus taking Social Security at 67. However, that doesn't mean that taking your benefit at 67 or even 70 is the smart call, especially if your current financial situation -- and your ability to change it through other means -- is unlikely to change. 

Yes, it's best to get the maximum benefit you can simply to make sure you have as much income as possible as you get older in order to maximize your independence and quality of life. But if you're in a situation where you simply cannot afford to wait, and that's not going to change, then take your benefit before 67. Most people qualify for Social Security retirement benefits starting at age 62, and some situations, such as the death of a spouse, may allow you to qualify for some benefits even earlier. 

The point is this: We each must find the balance between the biggest monthly check we can get and making ends meet today. If you can afford to delay so that your monthly check is bigger, that can make a big difference as you get older. But if you need the income sooner, then don't put it off if you can't afford to. 

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Not at retirement age? Don't set it in stone just yet
Dan Caplinger: One of the nicest things about claiming Social Security benefits is that you don't really have to decide in advance what you're going to do. Having a tentative target for your retirement makes sense to help you plan, but you shouldn't treat any age as being carved in stone.

For instance, right now, anyone who was born in 1960 or later has age 67 as their full retirement age. Yet if you plan for that as a hard stop to your career, then potential law changes down the road to push full retirement age higher could leave you unprepared for lower benefits. Especially for those who are currently in their 20s and 30s, the potential for further increases to full retirement age is fairly substantial. As the key solvency dates for the Social Security Trust Fund approach in the mid-2030s, you can expect the government to consider changes to benefits, and pushing the retirement age higher is one popular solution among policymakers. Similarly, if something happens to you in your personal situation that requires a change in plans, building in flexibility on when you claim Social Security can make it a lot easier to do what you need to do.

Full retirement age of 67 will be a natural target for those born in 1960 or later. Yet considering the possibility of earlier or later filing is essential to give you the flexibility to deal with unpredictable situations arising.