Social Security benefits are vital to the finances of tens of millions of U.S. seniors. In fact, more than 40% of baby boomers say their monthly checks will be their primary source of retirement income, according to a 2023 report from the Transamerica Center for Retirement Studies.
When it comes to maximizing the size of your monthly Social Security checks, the age at which you begin taking them is one of the most important factors. You can file as soon as you turn 62 or anytime after that, but the longer you wait -- up until you hit 70 -- the more you'll receive each month.
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There's plenty of debate over when the best time is to begin taking benefits: Some experts urge retirees to delay, while others encourage filing early. But what does the data have to say about it? A comprehensive study shows there's a clear answer.
How your age affects your benefit amount
Before you decide what age to begin taking benefits, it's first important to know your full retirement age (FRA) and how it affects your payments. Your FRA is the age at which you'll receive what the government calculates as the full retirement benefit you qualify for based on your work history. While FRA varies by your birth year, for everyone who hasn't yet retired, it will be between 66 and 67.
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If you file as early as possible -- when you turn 62 -- your benefit check will be reduced by up to 30% compared to what you'd receive at your FRA. If you delay benefits until you're 70, you'll receive your full benefit amount plus a bonus of between 24% and 32% per month, depending on your FRA.
One common misconception about filing early is that your benefits will only be reduced until you reach your FRA, at which point you'll start receiving larger checks. In reality, though, these adjustments are permanent. If you file early, you'll collect smaller monthly payments for the rest of your life. But this also means that by delaying benefits, you'll earn permanently higher payments.
Is it better to claim Social Security early or delay?
While the right decision for you will depend on your unique situation, it can be helpful to see what the data says about claiming at different ages.
In 2019, researchers at United Income studied retirees' claiming decisions as well as how those choices affected their overall incomes throughout the rest of retirement. From there, they determined how many retirees made the financially optimal decision to maximize their lifetime income.
They found that while claiming early was the most popular choice (roughly 70% of retirees file before they turn 64), that wasn't the best financial decision for most people. In fact, when it came to maximizing lifetime income, claiming at 62 or 63 was the optimal choice for only 6.5% of study participants.
Waiting until 70, on the other hand, was the least popular claiming decision -- but also the most lucrative. Only 4% of retirees filed at 70, according to the researchers, yet 57% of participants could have received more money over their lifetimes by claiming at this age.
These decisions had an enormous impact on retirees' financial lives, too. The researchers found that the average household of retirees misses out on around $111,000 in lifetime income by filing at the sub-optimal age. Furthermore, around 1 in 5 older adults at risk of not being able to afford retirement would have seen an improvement in their situations by filing at the financially optimal age.
What does this mean for you?
According to the data, 70 is the ideal age to file for most retirees. However, this research only accounts for the financial side of this decision, so it doesn't necessarily tell the full story.
If you're looking to maximize your total income in retirement, waiting until 70 is often the best move. You will receive hundreds of dollars more per month by delaying claiming Social Security, which can go a long way if your benefits are going to be your primary (or only) source of income in retirement.
That said, claiming early can also be smart in some situations. For example, maybe you have a robust retirement fund and want to retire sooner. If you don't think you'll need a larger Social Security payment to shore up your budget, filing early can make it easier to retire in your early 60s without having to rely solely on your savings and investments.
Also, if you have reason to believe you may not live a longer-than-average life, filing early could result in earning more over a lifetime. Each check will still be smaller, but if you don't live well into your 70s or beyond, you could collect more in total by filing early.
There's no single best age at which everyone ought to take Social Security, but when you're weighing the choice, it's important to be honest with yourself about your retirement goals and expectations. While waiting till you're 70 can maximize your monthly benefits, consider the big picture before deciding whether it's really the right move for you.
