One nice thing about Social Security is that you can decide when to sign up for benefits with the understanding that your filing age will help determine how much money you'll get on a monthly basis. If you claim benefits at full retirement age, or FRA, you'll get your complete monthly benefit based on your earnings history. FRA is 67 for anyone born in 1960 or later. For each month you claim Social Security ahead of FRA, your benefits will be reduced.
The earliest age at which you can sign up for Social Security is 62. While there's no official latest age to file for benefits, you'll often hear that it's 70 because there's no financial incentive to delay your claim beyond that point. For each month you postpone your Social Security filing past FRA, your benefits will get a permanent boost, but that incentive will run out once you reach the age of 70.
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If you would've asked me a few years ago what my anticipated Social Security filing age was, I probably would've said 70. But lately, I've been thinking of changing my filing strategy and planning to sign up for benefits at age 62 instead. Here's why.
I'm hoping my benefits are meaningless in the grand scheme of my retirement finances
I like the idea of being able to score a higher Social Security benefit for life, which is why filing at age 70 always appealed to me. But I've since realized that by planning to claim benefits at age 70, I'm putting a lot of pressure on myself and making certain assumptions -- for example, that I'll be able to hold off on collecting Social Security for that long.
That's why I think planning to sign up for Social Security at age 62 might be a better bet for me. See, my hope is to really not need Social Security at all during retirement for any essential expenses. Rather, my goal is to be able to pay for things like housing, food, healthcare expenses, and utilities based on the money I manage to save for retirement during my career and the money I'm able to generate from part-time work.
I'm hoping that any funds I get from Social Security will represent money I can use for leisure purposes or as extra cash to potentially donate to charity. In that regard, planning to sign up at age 62 shouldn't really hurt me financially because even if I end up with a smaller monthly benefit, it shouldn't impact my total picture too much.
Of course, I'm nowhere close to being able to claim Social Security, so chances are I'll keep flip-flopping about my filing age until I actually have to make that call. But for now, I'm starting to strongly consider changing my tune and planning to sign up for Social Security at age 62. The way I see it, if it's money I'm not counting on, then it really shouldn't matter if I get a little less of it each month.
