Deciding what age to claim Social Security is an important retirement milestone, as it will affect your monthly payments for the rest of your life.
Age 62 is the earliest you can file for benefits, and it's also the most popular choice among retirees. In fact, around 35% of men and close to 40% of women claim Social Security at age 62, according to a 2020 report from the Bipartisan Policy Center.
Although fewer than 10% of older Americans claim at age 70, according to the report, there are significant advantages to waiting. By delaying benefits until age 70, you'll earn substantially larger checks each month.
The age at which you choose to claim depends largely on your unique situation, but there are some instances when you may be better off filing earlier or later in life.
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When it's best to claim at age 62
By claiming Social Security as early as possible, your checks will be reduced by up to 30% compared to what you'd receive by claiming at your full retirement age (FRA). Also, your benefit amount won't increase once you reach your FRA, so your benefits are generally locked in for life once you file.
That said, there are some instances where it pays to claim early despite the smaller checks. If you have a robust retirement fund, for example, you may choose to claim early and get a jump-start on retirement. Although you'll receive less each month from Social Security, that may be a small sacrifice in order to retire earlier.
It's also a good idea to consider your overall health and life expectancy when deciding at what age to file. If you're battling health issues or have reason to believe you may not live a longer-than-average lifespan, claiming early could give you more time to enjoy your benefits.
When you're better off waiting until age 70
The primary advantage of delaying benefits until age 70 is that you'll receive substantially larger payments each month.
Say, for example, you have a FRA of 67 years old and will receive $1,500 per month by claiming at that age. If you were to claim at age 62, your benefits would be reduced by 30%, leaving you with $1,050 per month.
However, if you were to wait until age 70 to file, you'd receive your full benefit amount plus an additional 24%. That comes out to $1,860 per month, nearly double what you'd receive by filing at age 62.
If maximizing your monthly income is your primary goal, waiting until age 70 to claim is a smart move. You may also choose to delay benefits if you expect to live a longer-than-average lifespan. If your savings eventually run out later in life, those larger checks could go a long way.
Which option is right for you?
The age you file for Social Security is a personal decision, and there's no right or wrong answer. By considering your financial situation, your health and estimated lifespan, and your priorities in retirement, you can choose the age that's best for you.
