There are a lot of factors that go into the decision of when to start claiming Social Security.
Practically every claiming age has its plusses and minuses. Claim as soon as possible -- age 62 for most -- to receive your monthly benefit for longer. Wait as long as possible -- age 70 or later -- to get the biggest check. Many find waiting until full retirement age to be a solid compromise.
Full retirement age is the age when you'll receive your primary insurance amount. You're not claiming early so there's no penalty, and you're not delaying your claim so there's no added amount. It's also the point where you can maximize spousal benefits. Anyone born in 1960 or later will reach full retirement age at 67.
But there are some downsides to claiming at age 67. Here's the unfortunate truth.
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You're taking a risk
Claiming at 67 means you have to wait five long years from when you're first eligible to claim Social Security. What's more, you're betting you'll live long enough for your higher benefits check to overcome those five years of missed payments.
While the odds are in your favor, that's far from a sure bet. Recent CDC life expectancy data showed the average 60-year-old can expect to live until 82 years and 8 months. And if you make it to 65, your life expectancy improves to 83 years and 10 months.
To break even on your decision to delay your benefits from age 62 until full retirement age, you'll only have to live until about 78 years old. So, for most people, it's a good risk to take. But there's still about a 23% chance a 62-year-old male doesn't reach 78 and a 13% chance the average 62-year-old female doesn't reach that age, according to actuarial data used by the Social Security Administration.
If you're in worse-than-average health or have a poor family health history, it might make sense to claim earlier rather than waiting until 67. For most people, though, 67 will work out better than claiming at 62, despite the risk. Still, they'll probably miss out on an even better option.
You'll reduce your benefits compared to age 70
For individuals claiming on their own earnings record, monthly benefits will max out at age 70.
Each year you delay Social Security beyond your full retirement age, you'll boost your monthly check by 8 percentage points until you reach age 70. So, delaying from 67 to 70 adds 24% (or so) to your monthly benefits check.
Most retirees end up better off by delaying until 70 versus claiming at 67. A 2019 study conducted by United Income found 57% of retirees would build more wealth throughout their life if they waited until age 70 to claim Social Security. The next best age for the average retiree is 67, but just over 10% would optimize their lifetime wealth by claiming at that age.
So, while 67 might seem like a nice compromise between claiming at 62 and 70, it's typically far from optimal.
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There is a notable exception, though. If you plan on collecting benefits on someone else's record, such as a spouse's, you won't earn any additional credits beyond full retirement age, so it may make sense to claim before 70.
For the majority of individuals, however, waiting until 70 is a better option than claiming at 67.
You'll reduce your survivors benefit
If you're a surviving widow or widower, you're eligible to claim up to 100% of your spouse's benefit amount.
If you pass away before claiming Social Security, your widow or widower will claim up to 100% of your primary insurance amount. But if you've already claimed, your surviving spouse will receive exactly what you were receiving. So, if you don't wait until 70, your spouse won't be able to receive the maximum survivors benefit possible.
That's an important consideration for many retirees. If you're an older spouse and the main breadwinner of the family, you need to consider how your claiming strategy will impact your spouse's livelihood after you're gone. Claiming at 67 means you're reducing how much your spouse will be able to collect for the rest of their life.
Survivor benefits present a unique opportunity for those who lose their partner in their 60s or earlier. That's because you can claim your personal benefit and your survivor benefit at different times. So, it benefits widows and widowers to claim one of those benefits as early as possible. Ultimately, however, a survivor's lifetime benefit is typically best supported by a spouse who can wait until 70 to claim their own benefit.
So, if you're in a position where you need to think about supporting your spouse or family after you've passed away, it typically pays to wait beyond age 67.
