What's the Best Age to File for Social Security?

Social Security is one of the most important social insurance programs in the United States, because it helps seniors afford to retire. Benefits are designed to replace about 40% of pre-retirement income, although for close to 50% of married couples and 70% of unmarried persons, they actually provide at least half of all money used to fund retirement. And Social Security has become even more important to retirees in recent years, as employer-provided pension benefits have become less common. 

Social Security has many advantages as a source of retirement funds. Benefits continue throughout your entire lifetime, and they increase with inflation to help you maintain buying power. The formula used to determine income from Social Security is also progressive, so lower-income workers receive a larger portion of pre-retirement wages to help ensure sufficient funds to live on. 

Because these benefits are so important, maximizing your income from Social Security is a key goal. And one of the biggest factors that affects that income is the age when you begin getting benefits. That's why so many people are interested in figuring out the best age to file for Social Security. 

Unfortunately, there's no one right answer to this question. For some retirees, it would make sense to claim benefits as soon as they become available, even though this will result in a reduced monthly check. For others, waiting until 70 to get the largest possible monthly check is a smarter move.

This guide will explain the pros and cons of claiming benefits at some of the most popular ages, including 62, 70, and either 66 or 67. We'll also provide details on why these ages are so popular for claiming.

Image source: Getty Images.

When can you claim Social Security benefits?

You can claim Social Security benefits starting at the age of 62, provided you've earned a sufficient number of work credits. These credits are earned when you pay Social Security taxes on a certain amount of wages each year. You can earn up to four credits annually, and the cost of a credit varies from year to year. In 2019, you earn one work credit for each $1,360 in earnings and max out on your four credits after earning $5,440. 

Sixty-two is a very popular age to start receiving income from the Social Security Administration, since many people need to get their benefits as soon as they can. However, while you can claim as age 62, this is considered to be claiming early and will result in a reduction in your standard Social Security benefit. Your standard benefit, called your primary insurance amount (PIA), is based on average wages earned during your career, and it's paid out if you retire at full retirement age (FRA).  

Full retirement age was 65 when Social Security was created, but 1983 amendments to the law slowly pushed FRA back in recognition of longer life-spans. It's now between 65 and 67, depending on when you were born -- which is why 66 or 67 are popular ages to claim benefits. You can find out your FRA in this guide to full retirement age or in the chart near the bottom of this article.

If you retire after FRA, you'll earn delayed retirement credits that increase your PIA. This results in higher monthly checks. You can only earn these credits until age 70, after which you see no further increase in benefits if you wait longer to start receiving them. That's why 70 is also a popular age to claim benefits. 

Does it matter what age you claim Social Security benefits?

Your age at the time you claim Social Security benefits affects the size of your monthly checks, but it's not supposed to alter the total amount of income you get during your lifetime. In other words, people who first claim benefits at 62 are theoretically supposed to receive the same benefits over their lifetimes as those who claim at 70, despite getting benefits for eight extra years.

That's because the Social Security system used actuarial tables to estimate life-spans and to set a reduction in monthly checks for early claiming and an increase in monthly checks for late claiming. The idea is that a person who gets benefits at a younger age gets more checks, but each check is smaller. Conversely, a retiree who waits will not receive as many checks, but each month's income will be higher once benefits begin. 

Of course, not every retiree lives to their projected life-span. If you pass away before age 70, obviously you'd have received more benefits if you claimed at 62 than if you waited. On the other hand, if you live until 102, you'd have been better off waiting to start benefits to maximize monthly income, since you'd outlive your actuarial life-span and receive the highest possible benefit for many more years than the SSA anticipated. 

What happens to your benefits if you claim early, at FRA, or late?

If you claim benefits at exactly FRA, you receive your PIA. Your PIA is determined by:

1. Adjusting the wages earned over your career for inflation. This is done using the average wage index, and you can learn more about this process in our guide to how your work history determines Social Security benefits. 
2. Adding up your annual inflation-adjusted wages in the 35 years you earned the most. Only wages up to a maximum income threshold, called the wage base limit, count, because you only pay Social Security tax on wages up to that limit. Anyone who hasn't worked 35 years will also have some years of $0 added in. 
3. Dividing by 420. This determines your Average Indexed Monthly Earnings (AIME) over 35 years, as 420 is the number of months in a 35-year career. 
4. Applying a progressive formula that gives you benefits equal to a certain percentage of income. You receive benefits equaling 90% of AIME up to a first bend point; 32% of AIME between the first and second bend point; and 15% of AIME above the third bend point. Bend points, which are income thresholds, change each year based on the average wage index. For 2019, the first bend point is $926 and the second is $5,583 (bend points for the current year are found on the SSA's website and the bend points from the year you turn 62 are the ones used to calculate your benefits). 

If you claim benefits prior to FRA, your PIA is reduced. You can learn the specific details in this guide to claiming benefits early, but essentially the reduction equals:

• 5/9 of 1% per month prior to FRA for the first 36 months 
• An extra 5/12 of 1% per month for any additional months if you file for benefits more than 36 months prior to FRA

If you claim benefits after FRA, your PIA is increased. Details can be found in this guide to delayed retirement credits, but the increase equals:

• 2/3 of 1% per month after FRA that you claim benefits. 

The reduction in benefits amounts to about a 6.7% decrease in PIA per year for each of the first three years you claim before FRA, and an additional 5% decrease for each prior year. The increase, on the other hand, is worth about 8% annually.

If you get a 6.7% decrease by claiming one year early, you'd multiply your PIA by 6.7% to calculate the decrease. So, if your PIA was $1,500, your benefits would be reduced by about $100 (6.7% of $1,500) and you'd only get $1,400 per month if you retired one year before FRA. If benefits are increased by waiting, multiply your PIA by the increase. Your $1,500 benefit would increase by $120 (8% of $1,500) to $1,620 per month if you waited a year to claim it. 

What's the best age to file for Social Security?

The best age to file for Social Security depends on many different factors, including the following seven key considerations.

How healthy you are

If you're in poor physical health and don't expect to live long enough to receive Social Security benefits for decades, filing early makes sense to start getting income from the SSA as soon as possible. If you delay, you'd receive a higher benefit -- but perhaps not for enough years to make up for missing out on income lost due to waiting.  

Whether you need the money

If you are forced into early retirement by physical problems, family needs, or lack of employment opportunities, you may have insufficient savings to sustain you, and you may be forced to claim benefits as soon as they become available to you. 

Your work history

Remember, your Social Security benefits are based on an average of your 35 highest-earning years. If you haven't worked for 35 years, you may want to put off claiming benefits and work longer so you have no years of $0 wages factored in when benefits are calculated. If your salary at the tail end of your career is higher, it may also make sense to work longer so you can have years of a higher salary replace early years when your income was lower. 

Your lifestyle preferences

Some people want to get as much money in early retirement as they can, so they're able to enjoy life while they're still relatively young and healthy. Others prefer to wait and raise their Social Security income so they get larger checks later in life when they may have more healthcare needs or when their savings are beginning to dwindle. 

Your retirement account balances

If you've saved too little money for retirement, you may be concerned about drawing down your investment accounts too quickly. You may want to claim Social Security as soon as possible so you can rely more on these benefits and leave your retirement funds to grow. 

Whether you plan to work while receiving benefits

If you work prior to FRA, some or all of your Social Security benefits could be withheld if you earn too much. There's little point in claiming benefits you won't receive anyway -- even though you do get credit for withheld benefits and your checks are larger later. You can learn more about this in our guide to working while collecting benefits. 

Whether you need to consider your spouse

When one spouse passes away, the other spouse could choose to receive survivors benefits if those benefits are higher than the widow/widower's current benefits. The amount of survivors benefits is based on work history and age when the deceased spouse claimed benefits. If you were the higher-earning spouse, you may want to maximize your Social Security benefits by waiting to claim them so your spouse gets the highest possible survivors benefit after you pass on. You can learn more in our guide to survivors benefits. 

Ultimately, the right decision will depend on whether you are better off getting your money ASAP -- even if you get less of it per month -- or getting more money later in life. 

Should you claim Social Security at 62?

Claiming Social Security benefits at the age of 62 would result in a 30% benefits reduction if your FRA is 67 and a 25% reduction in benefits if your FRA is 66. This means if you'd have received $1,500 in monthly Social Security benefits at FRA, you'd receive just $1,050 if your FRA is 67 or $1,125 if FRA is 66. 

All future Social Security raises are based on a percentage of your starting benefit. So, by claiming earlier, you will also receive smaller raises over the course of your life. If you receive a 2% benefits increase due to the rising cost of living, your monthly check would go up by just $21 if you had retired at 62 instead of 67 compared with $30 if you'd retired at FRA and gotten your full $1,500 benefit. While $9 a month may seem small, it's $108 per year. And when your raises are a little bit smaller every year, this can have a big impact over time when you receive retirement benefits for decades.  

The big plus side of getting benefits at 62 is that you start getting money earlier. You could invest this money if you don't need it, or use it to live on and enjoy life or to preserve your savings.

You also don't need to worry about living long enough to break even for delaying. Say, for example, that you delayed until the age of 67. 

• You would forgo five years of income by waiting compared with claiming at 62. If your monthly benefit is $1,050 at 62, this would mean missing out on $63,000 in benefits ($1,050 x 60 months of benefits you left on the table by waiting five years to claim). 
• Your monthly benefit at 67 would be $450 per month higher ($1,500 at 67 versus $1,050 at 62). 
• You'd need to receive an extra $450 per month for 140 months ($63,000 / $450) to make up for missing out on $63,000 of income. 
• You'd need to receive the higher benefit for 11.66 years in order to break even -- so unless you lived until 78.66 (11.66 years after starting to receive benefits at age 67), you wouldn't make up for missing years of benefits.

Should you claim Social Security at full retirement age?

Claiming benefits at full retirement age would mean claiming between age 66 and 67, depending on your FRA. The chart below shows what FRA would be for you, based on your birth year. 

Table source: Social Security Administration.

Claiming at this age allows you to get your primary insurance amount, so you don't need to worry about accounting for either a benefits increase or a benefits decrease. It's essentially a compromise between claiming early and claiming late. 

Claiming at FRA also means you can work as much as you want without worrying about any benefits being withheld. And you won't cause a cut to survivors benefits that could impact your widow or widower after you pass on. 

Should you claim Social Security at 70?

Claiming at 70 would result in a big increase in your monthly check. The specific increase depends on whether FRA is 66 or 67.

• If your FRA is 66, you could earn delayed retirement credits for a maximum of four years and could increase your monthly checks by 32% compared to claiming at FRA.
• If your FRA is 67, you could only earn three years of delayed retirement credits, so the maximum increase to your checks would be 24%. 

By maxing out your benefit, you get the highest possible income from Social Security, and your annual Social Security raises will also be bigger, since they're based on a percentage of your benefit. Your survivors will get the largest possible survivor's benefit if you pass away. And you can work as much as you want without worrying about any of your benefits being withheld.

The downside is that you may not live long enough to make up for years of missed benefits. Remember, as we explained above, you have to calculate how many years it will take you to break even for missing benefits.

• Say your FRA is 67. If you don't claim benefits until age 70 and you'd have had a standard benefit of $1,500 at FRA, your benefits at 70 would be $1,860 -- 24% higher.  
• Between age 62, when you first could've claimed, and and age 70, you'd miss out on eight years of benefits equal to $1,050 per month (the reduced benefit you'd have received starting at 62). That's $100,800 in benefits. 
• Your benefit at age 70 is $810 per month higher than it would have been at 62. 
• Divide $100,800 (income forgone) by $810 (higher monthly income) to see you'd need to receive the higher benefit for 124.4 months or 10.37 years to break even for eight years of missed benefits. 

So, unless you lived until 80.37 -- long enough to receive benefits for 10.37 years after starting to get them at 70 -- you'd have been better off claiming at 62 because you'd have gotten more total income over time.

There is no best age to claim benefits

As you can see, there is no best age to claim benefits. The best age for you may be your full retirement age, age 62, age 70, or some other age in between.

You'll need to decide when to claim based on your own goals for retirement as well as your overall financial situation. But now you know how claiming at different ages could affect monthly income so you can make a more informed choice.