The age you begin claiming Social Security benefits will affect your monthly income for the rest of your retirement.
Age 62 is the earliest you can file, but the longer you wait, the larger your monthly payments will be. Delay benefits until age 70, and you could collect hundreds of dollars more each month. But waiting until age 70 isn't always a wise move. There's one great reason you may want to file earlier: You might regret waiting too long.
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Expecting the unexpected
On paper, waiting until age 70 to start taking Social Security makes sense. If you have a full retirement age (FRA) of 67 years old, you'll receive your full benefit amount plus an additional 24% each month by waiting to claim until age 70.
In reality, though, life doesn't always work out so perfectly, and you could regret waiting so long to take benefits.
For example, if you unexpectedly develop health issues in your early 70s, you might not have as much time to enjoy your retirement as you had planned. Or maybe you reach your 70s and regret how much time you missed with your grandchildren or doing other activities you love.
When claiming early could be a smart move
Of course, you could also face regrets if you claim early. If money is tight, you may claim at 62 only to wish you'd waited a few years to earn those larger checks.
However, when you claim early, you have more options if you change your mind. Within the first 12 months of filing, you can withdraw your application. You will need to repay whatever money you've received in benefits up to that time, but then you're free to claim again later.
If you're past the 12-month mark or can't afford to repay your benefits, you can also suspend benefits. Once you reach your FRA, you can essentially press pause on collecting Social Security up to age 70. After you begin receiving benefits again, you'll earn larger payments.
If you're not 100% positive about when to claim, it could be smart to file earlier. Change your mind, and you still have the option to wait a few years. But if you delay benefits until 70 and regret your decision, there's not much you can do.
The best reason to consider waiting
In many cases, claiming Social Security earlier could be a smart move. But that doesn't mean that filing at 70 is always a bad decision.
Perhaps the best reason to consider waiting is if you need the extra cash. When you file at age 62, your benefit amount will be permanently reduced by up to 30%. But if you delay until 70, that extra 24% each month can go a long way.
For instance, say your FRA is 67, and you'll collect $1,800 per month by filing at that age. If you claim at 62, you'll receive just $1,260 per month. Wait until 70, though, and you'd earn $2,232 per month -- a difference of $972 per month.
While there's no right or wrong answer as to when you should take Social Security, claiming early can be a smart decision in some cases. By weighing the pros and cons of all your options, it will be easier to choose the right age for your situation.
