One of the nice things about Social Security is that you get to decide when to start taking benefits. You can do so beginning at age 62, or you can file at a much later age.
In fact, there's actually no such thing as a "final age" to claim Social Security, so if you want to sign up for benefits at age 90, so be it. But financially speaking, there's no incentive to delay your filing past the age of 70.
Now, the problem with claiming Social Security at age 62 is that you'll reduce your monthly benefits for life in the process. Filing at age 70 will have the opposite effect -- your benefits will get a nice boost that you'll be able to enjoy throughout your retirement. But you'll have to wait longer -- and potentially work longer -- for that to happen.
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That's why you may end up deciding that neither 62 or 70 is your ideal Social Security filing age. And you may want to consider filing at age 67 instead.
It's all about meeting in the middle
If you born in 1960 or later, age 67 is when full retirement age kicks in. That's the age at which you're entitled to your full monthly Social Security benefit based on your personal earnings history.
Now many people want to get their money from Social Security earlier on, and so they opt to sign up for benefits as soon as they're able to. Filing at age 62, however, means slashing your Social Security payments by 30% for life if full retirement age doesn't arrive until 67. That's a huge financial hit to absorb -- and one that might be problematic if you don't have a lot of money sitting in your IRA or 401(k) plan.
Meanwhile, you may be enticed by the idea of a higher monthly benefit, and all you need to do to snag one is delay your Social Security filing past full retirement age. But that means you're waiting longer to get your money. And that could mean being forced to stay at a job you can't stand, or one that isn't particularly good for your health.
That's why filing for Social Security at age 67 may be a good solution if that's full retirement age for you. While you won't get to boost your monthly benefit by going this route, you also won't face a reduced benefit. And while you'll have to wait a bit to get your money, you won't be waiting too long.
Remember, too, that there's a risk in delaying your Social Security claim. If you don't end up living as long as expected, a later filing could leave you getting less money from Social Security in your lifetime, despite a higher monthly paycheck. Filing for benefits at age 67 helps mitigate this risk to some degree.
It's a very personal choice
You might hear that age 62 is the best age to claim Social Security. And you might also hear that waiting until 70 is the more financially sound choice.
The reality is that there's no right or wrong answer. Ultimately, you'll need to think about the financial role those benefits will play in your retirement, and how you feel about your job, among other factors.
The point, either way, is that the decision to claim Social Security is an extremely personal one. And as such, you need to do what's best for you. You may find that filing for benefits at 67 works well given your needs. But if not, there's absolutely nothing wrong with claiming Social Security at a different age.
