The age you begin taking Social Security will have a major impact on your retirement, as it will determine your monthly benefit amount for the rest of your life.
To receive the full benefit you're entitled to based on your work history, you'll need to file at your full retirement age (FRA). This age depends on your birth year, but it's 67 years old for anyone born in 1960 or later. If you file before or after that age (as early as 62 or as late as 70), you'll receive an adjusted payment.
But what's the best age to take Social Security? Research suggests that most people would benefit from filing at a particular time, but it's not as clear-cut as it might seem.
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The best age to take Social Security, according to data
By filing for benefits at age 62, your payments will be reduced by up to 30%. If you delay until age 70, though, you'll receive your full benefit plus a bonus of between 24% and 32% per month. These adjustments are permanent, too, so your claiming age will affect your monthly income for the rest of your retirement.
In 2019, researchers at United Income studied retirees' claiming decisions and how those choices affected their benefits over a lifetime. From there, they determined how many people made the optimal claiming decision to maximize their lifetime income.
They found that although most people claim Social Security before age 64, that's the optimal choice for only 6.5% of retirees. Meanwhile, around 57% of retirees could have earned more over a lifetime by waiting until age 70 to claim.
The difference adds up significantly, too. The researchers found that the average retired household misses out on around $111,000 worth of income over a lifetime by claiming at the sub-optimal age.
Is this really the best move for you?
According to this data, most people are better off waiting until age 70 to take Social Security. But finances are only one part of the equation, and there are other factors to consider before you decide on an age to file.
Your health, for example, could play a major role in your decision. While it's not the most pleasant topic to think about, if you have reason to believe you'll live a shorter-than-average lifespan, it may not make sense to wait until age 70 to take Social Security. In some cases, you could even receive more over a lifetime by filing early.
Also, if you retire in your early 60s, taking Social Security earlier can make retirement more affordable. While you can retire early and delay benefits, you'll need to rely on other sources of income in between -- which risks draining your savings too quickly. Whether you plan to retire early or are forced into retirement through job loss or health issues, Social Security can help your nest egg last longer.
There's no single best age to take Social Security. If you're looking to maximize your retirement income, delaying until age 70 could be your best bet. But there are valid reasons to take benefits early, too. By weighing the pros and cons of all your choices, it will be easier to make the best decision for your retirement.
