Choosing a Social Security claiming age is one of the most important retirement decisions you'll make, and it will affect your monthly income for the rest of your life.
This decision is highly unique to your situation, so there's not necessarily a right or wrong time to begin taking benefits. That said, when it comes to the financial side of this choice, statistics show that there's one age, in particular, that reigns supreme -- and it could boost your retirement income by hundreds of thousands of dollars.
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How your age affects your benefit amount
First, it's important to understand exactly how your monthly checks are impacted by your claiming age.
Filing at your full retirement age (FRA) will earn you 100% of your earned benefit based on your work history. Your FRA will depend on your birth year, but it's between ages 66 and 67 for everyone. Filing earlier than your FRA will reduce your monthly payments, while waiting past that age to claim will result in a bonus on top of your full payment.
These adjustments can be significant, too. If you claim as early as possible at age 62, your benefit will be permanently reduced by up to 30%. By waiting until age 70 to file, you'll receive up to 32% extra each month in addition to your base payments.
The best age to take benefits, according to data
Again, there's not necessarily a one-size-fits-all answer as to when you should take Social Security. But some analysts have crunched the numbers to determine which claiming age is the most lucrative, and the answer was clear: age 70.
That's probably not much of a shock, considering delaying benefits earns you the largest possible monthly checks. However, it may be surprising to learn just how much more retirees can earn over a lifetime by waiting until age 70 to file.
A 2019 report from United Income examined retirees' claiming ages and how those choices affected their lifetime income. Researchers found that the average retired household will miss out on around $111,000 in lifetime income by claiming Social Security at the "suboptimal" age.
They also discovered that only 6.5% of retirees could earn more in total by claiming prior to age 64, while a whopping 57% could maximize their lifetime income by waiting until age 70 to file. In other words, while age 70 isn't the best choice for every single retiree, the majority of retirees could earn far more by waiting.
A separate study by the National Bureau of Economic Research yielded similar results. This report, published in 2022, found that 91.6% of survey participants could maximize their Social Security income by filing at age 70. Furthermore, the median household could potentially increase its lifetime income by around $158,000 by claiming at the ideal age, the report concluded.
Some retirees are still better off filing early
It's important to note that both of these studies only examined the financial advantages of filing at a particular age. While finances should play a role in your claiming decision, there are other factors to consider, too.
For example, if you're battling health issues and have reason to believe you may not live well into your 70s or beyond, it may not make sense to delay Social Security. Sure, you could maximize your monthly payments. But if you only have a few years to enjoy them, you might have been better off filing earlier.
Claiming early can also be a smarter choice if you have a robust nest egg and want to retire earlier. Filing sooner will still result in smaller checks each month, but for some people, that's a worthwhile trade-off for early retirement -- even if it means making some financial sacrifices later in life.
Delaying Social Security until age 70 is often the more financially lucrative decision, and multiple studies support this conclusion. But finances are only one part of the equation, so it's important to consider your unique situation and goals to determine the ideal claiming age for your retirement.
