Choosing when to begin claiming Social Security is one of the most important retirement decisions you'll make, but it's not an easy choice. You can file for benefits at age 62 or anytime thereafter. Technically, there's no limit as to how long you delay, but there's no financial incentive to wait past age 70 to file.
Claiming as early as possible at 62 means you'll start getting benefits sooner, but each check will also be substantially smaller. Wait until age 70, and you'll receive much larger monthly payments -- but it's not always feasible or realistic to hold off that long on benefits.
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For many people, then, age 67 can be a smart compromise. You'll receive larger checks, compared to claiming at 62, but you won't need to wait as long as age 70. However, it's not quite so simple.
When it pays to file at 67
For anyone born in 1960 or later, age 67 is your full retirement age (FRA) -- which is the age at which you'll collect the full benefit amount you're entitled to, based on your work history and earnings record.
In other words, by filing at your FRA, you'll receive exactly what you're entitled to. You won't receive a bonus each month like you would by delaying benefits, but your payments also won't be reduced.
If you're on the fence about when to claim, age 67 can be a nice compromise. You'll receive hundreds of dollars more per month than you would at 62, which can go a long way if your savings are falling short.
While delaying benefits until age 70 will give you the highest possible monthly payments, that's not always possible. Many people hold off on retiring until they claim Social Security, and working until age 70 could mean sticking with a stressful or unhealthy job and missing out on valuable time in retirement.
Downsides to consider
Claiming at age 67 can be a smart move for many people, especially if 67 is your FRA. But there's no one-size-fits-all approach to taking Social Security, so it won't be the right strategy for everyone.
If you're battling health issues or have other reason to believe you may not spend several decades in retirement, it may be wise to file sooner rather than later. Claiming at 62 will result in smaller checks but can give you more time to enjoy your senior years.
On the other hand, if your primary goal is to maximize your monthly income, delaying retirement until age 70 could be your best bet. This is especially true if you expect to run out of savings later in retirement, as those larger checks will make it easier to continue making ends meet.
What's the best option for you?
There's no right or wrong time to claim Social Security, so it's a highly personal decision. In some cases, filing as early as possible is the best possible move. For other people, delaying benefits will result in a far more comfortable retirement.
The ideal strategy for you will depend on your unique situation. If you don't expect to live well into your 80s or beyond, filing early can help you enjoy your benefits for as many years as possible.
But if your savings are falling short or you simply want to earn as much as you can from Social Security, waiting until age 70 to begin claiming may be a better option. Or if you're already planning to continue working into your 70s, you might choose to delay Social Security, too, to earn those larger checks.
In short, there's no single right answer as to when you should file for Social Security, but age 67 can be a healthy compromise for many people. Regardless of when you claim, it's wise to think through all your options to ensure you're making the best decision for your situation.
