The Pros and Cons of Taking Social Security at 3 Different Ages

Deciding when to claim Social Security retirement benefits isn't as easy as it seems. See, you have a choice of claiming as early as 62, you could wait until 70, or could claim at any age in between.

Since there are benefits and downsides to claiming at each of these different times, let's take a look at the pros and cons of starting benefits at the three most popular ages: 62, full retirement age, and 70.

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The most obvious benefit to claiming Social Security at 62 is that you'll get your benefits as soon as you're allowed to do so.

Claiming early could make the difference between being able to retire and having to wait. Many people will decide that the upside of an earlier retirement is worth any downside.

When you delay claiming Social Security benefits beyond age 62, you're giving up all the payments between the time you first become eligible and the time you claim them.

You can eventually break even for the missed benefits, since delaying the start of your checks leads to the amount of your checks increasing. But it takes time, and not everyone will live long enough.

In fact, Social Security is designed so the amount of your lifetime benefits should theoretically be the same no matter when you start receiving them. As a result, you'll have to outlive your actuarily projected lifespan in order to end up better off for having delayed the start of your checks.

ALSO READ: How Your Social Security Break-Even Age Affects When You Should Claim Benefits

Social Security benefits come with periodic raises, which are supposed to ensure your benefits don't lose buying power. However, because of the way benefits increases are calculated, benefits have actually lost about 30% of their buying power over two decades. If that trend continues, and there's every reason to suspect it will, claiming benefits as early as possible makes sense.

Social Security's trust fund is also in financial trouble and expected to run dry in 2035, if not before. This doesn't mean you won't continue getting benefits as payroll taxes coming into the program can provide enough to pay out around 79% of the promised amount. But it could mean automatic benefit cuts occur.

Lawmakers could also act to change the program to shore up its financing -- and may do so by raising the full retirement age or otherwise cutting benefits.

You may decide you want to get as many checks as possible before a potential change occurs that could reduce the amount you receive. And that would mean claiming ASAP at 62.

If your spouse wants to claim spousal benefits on your work record, they can't do so until you've claimed your benefits. As a result, you may decide it makes sense to start getting them ASAP so your husband and wife can also get spousal benefits.

Couples used to utilize a file-and-suspend strategy. It allowed you to claim benefits ASAP, enabling spousal benefits to begin -- and then to suspend your own benefits to increase the amount you get later. This strategy is no longer allowed, though. So be aware that filing early to allow your spouse to get benefits permanently shrinks the size of your own checks.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

Retirees must wait until full retirement age (FRA) to get their standard benefit amount. And if they want to maximize their monthly Social Security income, they have to wait until 70.

If you claim at 62, you'll be subject to early filing penalties, since 62 is well before your full retirement age. Penalties apply on a monthly basis, for each month you claim ahead of FRA, and they add up quickly. For each of the first three years you claimed ahead of FRA, you'll see a 6.7% decrease in your payment. And your benefits will be reduced by an additional 5% annually for each year before that.

Someone with a full retirement age of 67 would, for example, shrink their monthly income by a whopping 30% per month compared with waiting until FRA.

ALSO READ: How Much Does Filing Early Cut My Social Security Benefits?

If you claim Social Security at 62 and accept smaller checks for life, you stand a good chance of shrinking your total lifetime benefits. In fact, for around six in 10 retirees, claiming at 70 is the right choice to receive the optimal amount of Social Security income.

ALSO READ: Sorry to Say: You Probably Shouldn't Claim Social Security at 62

If you want to work while collecting Social Security benefits, you risk forfeiting some of your monthly money if you haven't yet reached full retirement age. Since claiming at 62 is before FRA, you could end up losing some or all of your checks, depending how much you earn.

If you miss out on benefits due to your high paychecks, your check amount is recalculated at full retirement age to account for forgone money. But it takes a while to break even for the missed benefits, and not everyone will.

Plus, since you're missing out on money at the time you're working, you may not have the full amount of retirement funds you expected if you were counting on getting both your Social Security checks and your paychecks.

ALSO READ: Your Guide to Working While on Social Security

When one spouse passes away, survivor benefits allow the widow(er) to receive the higher of the two benefits either partner was receiving. If you were the higher earner and claimed benefits at 62, you'd have permanently shrunk spousal benefits -- thus increasing the chances your widow(er) will face financial hardship if you die first.

If you don't want to claim Social Security at 62 because the downsides outweigh the advantages, you may instead opt to start benefits at full retirement age. This is between 66 and two months and 67 depending on your year of birth.

The biggest benefit of starting your checks at FRA is that you'll get your standard benefit amount. You won't be subject to any early filing penalties that reduce the size of your monthly payment. Instead, it'll be based on your average earnings over the 35 years when you earned the most without any reductions applying for an early claim.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

If you wait until full retirement age, you'll be forgoing thousands of dollars in benefits you could've received. In fact, depending on exactly when your FRA is, you'll miss out on a little over four years of benefits or even as much as five years in benefits.

You should make up the missed money over time due to the higher monthly payments you get by waiting. But there's no guarantee you'll live long enough to do so. Plus, you'll have had less money to live on during those intervening years between 62 and FRA.

While you won't be subject to early filing penalties if you claim Social Security benefits at full retirement age, you will miss out on the chance to get the maximum possible monthly benefit. That's because you won't get any delayed retirement credits, which could be earned for each month you wait to start benefits beyond FRA until age 70.

Delayed retirement credits increase the size of your checks by as much as 8% annually for each full year you wait. And not only will these increase your own checks, but they'll also maximize survivor benefits in case you pass away first.

ALSO READ: Delayed Retirement Credits: What They Are and Why They're Getting Harder to Earn

Finally, the last popular claiming age to consider is 70.

Delaying your claim until 70 allows you to earn the maximum amount of delayed retirement credits. You can't earn them after that age, so by waiting until 70, your monthly benefit will be the highest that it can possibly be. Your spouse will also get higher survivor benefits if you pass away first.

For the majority of retirees, 70 is the best age to claim benefits in order to maximize total lifetime income. Since you pay into Social Security throughout your working life, it often makes sense to try to get the most money possible from it.

Many people can't afford to retire without Social Security. If you're one of them, this could mean you have to stay in the workforce until age 70 in order to delay your benefits claim. You may not want to wait that long to enjoy a life of leisure.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

While larger monthly checks make up for the benefits missed due to delaying for most retirees, this isn't the case for everyone. If you pass away before you actually claim your benefits or soon after, you'll miss out on a lot of income you could've received had you started getting Social Security checks sooner.

Now you know the pros and cons of claiming Social Security benefits at three popular times. The best choice depends on your financial situation and goals for retirement, so consider each of these advantages and disadvantages carefully when you make your decision.

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