For most retired Americans, Social Security is a foundational program. According to the Center on Budget and Policy Priorities, Social Security is responsible for pulling more than 21.7 million people out of poverty each year, including nearly 15.4 million adults aged 65 and over.
Furthermore, national pollster Gallup finds that close to 90% of current retirees rely on their monthly Social Security check, in some capacity, to cover their expenses.
In other words, Social Security income is a necessity to sustain the financial well-being of our nation's seniors. This also means it's imperative for retirees to get the most they can out of the program.
For future generations of retired workers, age 67 is likely to be a popular claiming age for a handful of reasons. However, you'll first need to understand the dynamics of how your Social Security benefit is calculated to determine whether the positives of an age 67 claim -- including the average monthly benefit at age 67 -- outweigh the potential negatives.
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The four pillars used to calculate your monthly Social Security check
Though there are more than a half-dozen factors that can impact what you'll ultimately get to keep from Social Security -- e.g., penalties for early filers and the taxation of benefits can reduce your take-home check -- there are four pillars used to determine your monthly Social Security check:
- Earnings history
- Work history
- Full retirement age
- Claiming age
These first two factors, earnings and work history, are inextricably linked. The Social Security Administration (SSA) takes your 35 highest-earning, inflation-adjusted years into account when calculating your monthly benefit. Not only will you bring home a larger monthly Social Security check if you earn more, but you'll have your benefit reduced if you don't work at least 35 years. For every year short of 35 worked, the SSA averages a $0 into your calculation.
The third pillar is your full retirement age, and it's completely out of your control. It represents the age you become eligible to receive 100% of your retired-worker benefit, and it's determined entirely by your birth year. Persons born in 1960 or later have a full retirement age of 67.
The fourth and final factor that goes into calculating your monthly Social Security check is your claiming age. Deciding when to begin receiving your Social Security check can greatly impact what you'll get each month and over your lifetime from America's top retirement program.
As you can see from the table below, Social Security strongly encourages its beneficiaries to be patient. For every year a retired worker waits to take their benefit, beginning at age 62 and continuing through age 69, their monthly payout can grow by as much as 8%.
| Birth Year | Age 62 | Age 63 | Age 64 | Age 65 | Age 66 | Age 67 | Age 68 | Age 69 | Age 70 |
| 1943-1954 | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% | 132% |
| 1955 | 74.2% | 79.2% | 85.6% | 92.2% | 98.9% | 106.7% | 114.7% | 122.7% | 130.7% |
| 1956 | 73.3% | 78.3% | 84.4% | 91.1% | 97.8% | 105.3% | 113.3% | 121.3% | 129.3% |
| 1957 | 72.5% | 77.5% | 83.3% | 90% | 96.7% | 104% | 112% | 120% | 128% |
| 1958 | 71.7% | 76.7% | 82.2% | 88.9% | 95.6% | 102.7% | 110.7% | 118.7% | 126.7% |
| 1959 | 70.8% | 75.8% | 81.1% | 87.8% | 94.4% | 101.3% | 109.3% | 117.3% | 125.3% |
| 1960 or later | 70% | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% |
Data source: Social Security Administration.
What's the average Social Security benefit at age 67?
Something else that probably stands out from the payout table above is the importance age 67 plays for most future beneficiaries.
For example, claiming benefits as early as possible for workers born in or after 1960 can result in a potentially painful permanent reduction in their monthly check of up to 30%. By comparison, eligible workers born in or after 1960 who take their payout at age 67 are entitled to 100% of their retirement benefit. In 2022, roughly 1 out of 7 new retired-worker claims were made at age 67.
How big of a monthly check can beneficiaries aged 67 expect? Based on data from the SSA, as of December 2022, the 2,849,908 retired workers receiving benefits at age 67 were taking home $1,844.83 for the month. This works out to roughly $22,138 per year. Furthermore, the average monthly Social Security check at age 67 is nearly 45% higher than the average monthly benefit at age 62 ($1,274.87).
There's a good chance the popularity of age 67 claims is going to grow substantially in the coming years. For one, age 67 represents the full retirement age for the vast majority of the existing American workforce. Eligible workers not wanting their monthly benefit to be reduced will have to wait until age 67 before taking their payout.
The other prime reason age 67 claims are bound to soar has to do with the disability conversion. When workers with disabilities hit their full retirement age, they're automatically converted from disability benefits to retired-worker benefits. Since age 67 represents the full retirement age for most of the labor force, the vast majority of future disability conversions will be recognized at this age.
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What's popular may not be what's optimal when it comes to Social Security benefits
On the surface, an age 67 Social Security claim looks to offer a solid middle-ground approach for most retirees. Waiting five years following initial eligibility ensures no monthly payout reduction. Meanwhile, claiming at age 67 means not having to wait an additional three years to potentially maximize your monthly benefit. You'll get your monthly payout early enough to enjoy it, but it also won't be reduced.
But what's popular isn't always what's optimal when it comes to Social Security benefits.
Four years ago, online financial planning company United Income released a report that comprehensively examined the claiming decisions of approximately 20,000 retired workers using data from the University of Michigan's Health and Retirement Study. The purpose of this analysis was to extrapolate these claims to determine if retirees made an optimal choice. In this instance, "optimal" means a claim that generated the maximum lifetime benefit from Social Security. (Note that a maximum lifetime benefit may not equate to the maximum monthly benefit.)
What United Income found was that actual claims and optimal claims were a nearly a perfect inverse of each other. Whereas a majority of retirees began taking their Social Security check well before reaching full retirement age, the lion's share of optimal claims occurred at or after full retirement age.
More specifically, United Income's analysis found that age 70 would have been the ideal claiming age for 57% of the roughly 20,000 case studies. For what it's worth, age 67 would have generated the highest lifetime income for around 10% of claimants, which was the second-most-optimal claiming age overall. Nevertheless, claimants aged 67 have a greater likelihood of leaving a lot of money on the table relative to waiting the additional three years and taking Social Security benefits at age 70.
While there are clear positives associated with making a claim at age 67, the data shows that waiting as long as possible (i.e., until age 70) can be an even smarter move for future retirees.
