You can start collecting your Social Security retirement benefits at any age from 62 to 70, and when you do so affects how big the checks will be. Start earlier, and you'll receive smaller checks; delay, and you'll receive bigger ones.
It's important to make smart decisions regarding Social Security -- after all, it's a major part of your future financial security, in part because so few people have been saving and investing sufficiently on their own. I will need to make this decision myself within the decade ahead, and right now I think I may start to collect at age 62.
Image source: Getty Images.
Here's a closer look at my thinking.
The all-important "full retirement age"
We all need to know our full retirement age, as defined by the Social Security Administration (SSA), because much depends on it. It's the age at which you're entitled to start collecting the full benefits you've earned. For most of us these days, it's 66 or 67.
The table below shows how much bigger or smaller your Social Security retirement benefits will be if you start collecting earlier or later than your full retirement age.
|
Start Collecting at: |
Full Retirement Age of 66 |
Full Retirement Age of 67 |
|---|---|---|
|
62 |
75% |
70% |
|
63 |
80% |
75% |
|
64 |
86.7% |
80% |
|
65 |
93.3% |
86.7% |
|
66 |
100% |
93.3% |
|
67 |
108% |
100% |
|
68 |
116% |
108% |
|
69 |
124% |
116% |
|
70 |
132% |
124% |
Source: Social Security Administration.
While it can look like delaying until age 70 is the no-brainer thing to do, think again. Starting to collect at 70 does make good sense for many people, but know that the system is designed so that those who live an average-length life will collect the same total benefits no matter when they start. After all, while starting earlier gives you smaller checks, you'll get far more of them. Delaying means you'll get bigger checks, but fewer of them.
My thinking -- and yours
Why am I thinking of starting to collect my benefits at age 62? Well, there are several reasons:
- Life is short -- or at least, it often is. If I can retire early, with the help of Social Security income, I'll be able to read lots of books I've been meaning to get to, visit loved ones I've been meaning to visit, and take trips that a working life hasn't easily permitted.
- I've been saving and investing for decades now, so I do have a nest egg accumulated that's likely to provide enough income to support my partner and me in retirement. Without that, I would probably need and want to keep working much longer, perhaps aiming to retire and start Social Security closer to age 70.
- As I'm married, my plans should be coordinated with my spouse -- indeed, we should have one plan. As she earns more than I do, if we want some retirement income as soon as possible, it makes sense to start my benefits early, and delay claiming hers, which will be greater. If we can delay claiming hers until she turns 70, we will have made them as hefty as possible, and at that point, we'll start collecting much more from Social Security. Also, when one of us dies, the other will receive only one of the benefit checks -- and can take the much larger one. That will be much better than if we had both started collecting early.
Take some time to learn more about Social Security. The more you know, the better the decisions you can make about it. For example, the average monthly Social Security retirement benefit was recently $1,478, or about $17,700 annually. The maximum monthly benefit for someone retiring at their full retirement age this year is $2,788, or about $33,500 for the year. Those aren't princely sums, but there are ways to increase Social Security benefits.
