According to a recent Pew Research Center survey, Americans think that, on average, the best age to get married is 26.5, the best age at which to have a child is 27.3, the best age at which to buy a home is 28.8, and the best age at which to retire is 61.8.
Regarding retirement, what's the perfect age at which to start collecting Social Security benefits? Given the Pew findings, you might think the perfect age is 62. For many millions, though, it's not. Here's a closer look at when you might want to start collecting your Social Security benefits.
Image source: Getty Images.
When you can start collecting Social Security
Each of us has a full retirement age -- which is 66, or 67 for those born in 1960 or later. We can claim our benefits as early as age 62, which will get us smaller checks. If we wait until our full retirement age, we'll receive the full benefits to which we're entitled, based on our earnings history. Alternatively, we can delay starting to collect our checks, with each year beyond our full retirement age beefing up our benefits by about 8% until age 70.
That can make it seem like waiting until age 70 is a no-brainer move. Well, remember that while your checks will be bigger, you'll get fewer overall. For example, imagine an 85-year-old who started collecting monthly benefits at age 62 and another 85-year-old who delayed until age 70. The first octogenarian will have received around 276 payments over 23 years -- so far. The second one will have received bigger checks, but only 180 of them so far.
Here's a clearer look at the percentage of your full benefits you'll receive at each starting age:
|
Start Collecting at: |
Full Retirement Age of 66 |
Full Retirement Age of 67 |
|---|---|---|
|
62 |
75% |
70% |
|
63 |
80% |
75% |
|
64 |
86.7% |
80% |
|
65 |
93.3% |
86.7% |
|
66 |
100% |
93.3% |
|
67 |
108% |
100% |
|
68 |
116% |
108% |
|
69 |
124% |
116% |
|
70 |
132% |
124% |
Data source: Social Security Administration.
When should you start collecting your Social Security benefits?
So when should you claim your Social Security benefits? Well, there really isn't a perfect age at which to do so, since different people are in different situations. Here are some things to consider that can help inform your decision:
- Our Social Security system is designed so that retirees get roughly the same total benefits no matter when they claim them -- assuming they live an average-length life. But few people have a good idea of how long they'll live, so read on for more considerations.
- If you are not in great health and/or many of your relatives have died relatively young, consider claiming your benefits early.
- If you stand a decent chance of living an extra-long life, consider delaying until age 70. Per the Social Security Administration (SSA), "About 1 out of every 3 65-year-olds today will live until at least age 90, and 1 out of 7 will live until at least age 95.")
- If you're married, you're best off coordinating when to claim benefits with your spouse. A solid strategy is to have the higher earner try to delay claiming until age 70, while the lower earner collects earlier. This can supply some income early, while maximizing the bigger benefit -- so that when one spouse dies, the survivor will get to keep that maximized benefit.
- If you simply need as much retirement income as you can get as soon as possible, perhaps due to a job loss, claiming early can make sense.
- There are other possible strategies, such as taking greater withdrawals from your nest egg in your first few years of retirement, in order to delay tapping Social Security.
- Remember, too, that Social Security benefits receive nearly annual cost-of-living adjustments (COLAs). So the bigger your benefit, the bigger each year's increase will be.
What the experts recommend
The considerations above offer good food for thought. Here's a few more:
- A 2019 study, "The Retirement Solution Hiding in Plain Sight: How Much Retirees Would Gain by Improving Social Security Decisions" from United Income, reported that millions of retirees leave trillions of dollars in potential total Social Security benefits on the table. It also found, "About 57% of retirees would build more wealth through their life if they waited to claim until they were 70 years old."
- A 2022 working paper from the National Bureau of Economic Research offered these eye-opening findings: "We find that virtually all American workers age 45 to 62 should wait beyond age 65 to collect. More than 90% should wait till age 70. Only 10.2% appear to do so. The median loss for this age group in the present value of household lifetime discretionary spending is $182,370."
So there you have it: For most people, waiting until age 70 is the best move -- if you can manage to do so. But for some among us, claiming benefits earlier can make plenty of sense.
