Deciding what age to begin taking Social Security is tough, mostly because the right answer will be different for everyone.
Age 62 is the most popular time to file, with roughly 35% of men and 40% of women filing at this age, according to a 2020 report from the Bipartisan Policy Center. But by waiting until age 70 to begin claiming, you'll receive substantially larger payments each month.
For that reason, research suggests that delaying Social Security until age 70 is the best move for the majority of older adults. But there's an important caveat to this claim, and in some cases, you may actually be better off filing early.
When it pays to wait until 70
To receive the full benefit amount you're entitled to based on your earnings, you'll need to wait until your full retirement age (FRA) to begin claiming. Your FRA will depend on your birth year, but it's age 67 for anyone born in 1960 or later.
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By filing at 62, your benefit amount will be reduced by up to 30%. But if you wait until 70, you'll receive your full benefit plus at least 24% extra each month for the rest of your life.
In 2019, researchers at United Income studied retirees' claiming choices to determine how many filed at the optimal age to maximize their lifetime income. Despite the fact that most retirees claim Social Security early, researchers found that filing at 62 or 63 was the optimal choice for only 6.5% of people.
In addition, around 57% of retirees could have earned more over a lifetime if they'd waited until age 70. Researchers also revealed that the average household misses out on around $111,000 worth of income throughout retirement by claiming at the sub-optimal age.
When it comes to choosing the best age to maximize your income, age 70 appears to be the clear winner. But there's more to Social Security than simply finances.
An important caveat to consider
Filing at age 70 may be the best financial decision, but there are other factors to consider when deciding the age at which you should take benefits. It's also important to think about your health and your priorities in retirement.
If you have reason to believe you may not spend several decades in retirement, claiming early could give you more time to enjoy your money. You'll still receive smaller payments each month, but if you don't expect to live well into your 70s or beyond, you could actually collect more over a lifetime than if you were to delay benefits.
Some people also simply want to retire as early as possible, even if it means making financial sacrifices. Filing at 62 can make early retirement more affordable, and if your main goal is to retire as soon as you can, claiming at this age might make the most sense.
The right age for you to take Social Security will depend on your priorities. If your ultimate goal is to earn as much as possible in benefits each month, waiting until age 70 is your best bet. But there are reasons to consider claiming early too, mainly if you want to retire earlier and are willing to sacrifice some monthly income.
Before you file, it's wise to know the pros and cons of all your choices. When you know how your age will affect your benefit amount, it will be easier to decide which option is the best fit for your situation.
