Choosing when to take Social Security benefits is an important decision that will affect the rest of your retirement. How much you receive each month will depend directly on the age at which you claim, so it's crucial to take this decision seriously.
Many experts recommend waiting until 70 to claim, because that will allow you to collect as much as possible each month. However, there's one key reason you should consider claiming much sooner than that: to avoid regret.
The decision you can't reverse
One little-known fact about Social Security is that if you claim too early, you have one opportunity to change your mind. As long as you withdraw your application within 12 months of claiming and are able to pay back the benefits you've already received, you can reverse your decision and wait until later to file.
But if you delay benefits and then change your mind, you can't go back in time and claim earlier. This means that if you decide to delay Social Security, you'll need to be positive it's the right decision.
It can be nearly impossible, though, to know whether delaying benefits is really the right move. What if, for example, you wait until 70 to claim but then develop health issues soon after? What if age starts to take its toll on your body and you can't enjoy all the activities you'd planned? Delaying benefits means betting your retirement on remaining healthy, and that's a factor you can't always control.
Retirement isn't over if your health starts to decline. But it can be more challenging to enjoy certain activities. If you're waiting until your 70s to retire, you might miss out on things you could have done if you'd claimed Social Security earlier.
When is the best age to claim?
There's not necessarily a "right" age to file for Social Security, because it will depend on your unique situation. Claiming sooner rather than later can be a smart move for many retirees, but keep in mind you won't receive as much each month by going this route.
By claiming as early as possible, at 62, you'll face a permanent benefit reduction of up to 30% compared to your full retirement benefit. You'll also give up delayed retirement credits that could've boosted your benefit by up to 32%, depending on your age. If you have a healthy stash of savings, these smaller Social Security checks may not have a significant effect on your retirement lifestyle. But if you're going to be pinching pennies, claiming early could make it more difficult to make ends meet.
One option to consider is retiring early and then also delaying benefits. Although many people choose to retire and file for Social Security at the same time, you can do one before the other. But if you retire in your early 60s and then wait until 70 to claim benefits, you'll need to be sure your savings can cover your expenses during that gap. If you drain your retirement fund just to collect larger Social Security checks, delaying benefits might not be worth it.
When you're deciding what age at which to claim, think about what's most important to you during retirement. Are you willing to live on less so you can have more time enjoying your senior years? Then claiming earlier might be your best bet. But if you'd rather have more spending money each month and are willing to risk the chance of regretting your decision, delaying benefits might be the way to go.
Regardless of which option you choose, be sure you've put plenty of thought into your decision. Your retirement depends on it.