Those who qualify for Social Security retirement benefits can choose to start collecting their monthly payments as early as age 62, as late as age 70, or at any point in between those two ages.
As you might imagine, 62 is a very popular age to start collecting Social Security, as many people choose to start getting income as soon as possible. 65 is another common age -- while full retirement age for Social Security is between 66 and 67, depending on when you were born, 65 is the age of Medicare eligibility, and for this reason, is a rather popular age to leave the workforce.
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One age that is not particularly common to start Social Security is 70. At first, you might think that many people try to wait as long as possible. After all, if your full retirement age is 67 and you choose to wait until 70, your retirement benefit will be 24% higher. However, a very small percentage of Americans wait until 70, and although a higher inflation-protected income stream certainly sounds appealing, I don't plan to join this particular club.
In a nutshell, my current plan is to claim Social Security at my full retirement age, which is 67 for everyone born in 1960 or later. Here are three key reasons why.
1. I want to enjoy my retirement while still (relatively) young
I've been maxing out my retirement accounts every year for more than a decade, and plan to continue doing so for as long as I'm working.
The reason I'm doing this is to be in a position to retire well before I reach age 70. And while I don't necessarily plan to stop working entirely when I'm in my early 60s, I want the ability to do so if I want. My wife and I want to travel extensively, and we'd like to do it while we're still relatively young.
2. I hope to not need the extra money from waiting until 70
Having a retirement benefit that is 24% higher than at my full retirement age would certainly be nice. After all, Social Security is likely to be the only inflation-protected source of retirement income I have. But as mentioned, I'm saving pretty aggressively for retirement and hope to not need the extra money that comes from waiting as long as possible.
To be sure, I want my full retirement benefit. I don't anticipate needing the money before I reach full retirement age, so I don't want to take an early retirement benefit reduction. If I end up leaving full-time work at age 65, for example, I can use my savings to bridge the gap between then and my full retirement age.
3. I'd like income for more years
Of course, none of us know how long we're going to live. We can use our family history as a general guideline, but that's not a bulletproof strategy. As a personal example, I have several relatives who lived well into their 90s, but also had a grandfather who didn't live to see 60.
By definition (assuming that you live until at least 70), claiming Social Security at 62 will get you eight more years of income versus someone who waits until 70. If you live to 80, for example, someone who starts Social Security at 62 will have 18 years of monthly payments, compared with 10 years for someone who waits until 70. I feel that claiming at full retirement age is a solid compromise between maximizing my income and receiving checks for more years.
It's subject to change
In full disclosure, I'm 42 years old right now. Under my current plan, I'm a quarter-century away from filing for my Social Security benefit, and there's a lot that can change in 25 years. Maybe I'll still love my job as much as I do now and will want to keep working full-time until I'm 70. Or maybe health or job-related reasons will prompt me to retire earlier than I plan to.
The point is, while it's smart to have a plan, it's also important to acknowledge that nobody can predict the future. There are perfectly valid reasons to start Social Security at age 62, at full retirement age, at age 70, and at any ages in between those. And there's no way to know which of those reasons will apply to me in a couple of decades.
