Los Angeles, California – Making the decision of when to begin receiving Social Security benefits can have a significant impact on your financial well-being in retirement. It is crucial to carefully consider your options, especially if you rely heavily on these benefits for your income during your retirement years.
Determining the optimal age to claim your Social Security benefits can vary depending on your individual circumstances. Research can offer valuable insights into the best and worst ages to start receiving these benefits.
When you decide to file for Social Security benefits will directly influence the amount of your monthly payments. Your full retirement age (FRA) plays a key role in this decision, with the age being 67 for individuals born in 1960 or later. Filing as early as age 62 can result in a reduction of benefits by up to 30%, while waiting until age 70 to file can increase your benefits by at least 24% per month.
A study conducted by United Income in 2019 analyzed the claiming decisions of retirees and examined their income over the course of their lifetime. The study found that claiming Social Security benefits at age 70 was the clear winner in maximizing lifetime income, with around 57% of participants potentially earning more by waiting until this age to file. On the other hand, claiming benefits before age 64 was deemed as the least optimal choice, with only a small percentage of retirees maximizing their lifetime income by filing at ages 62 or 63.
Choosing the best age to claim your Social Security benefits depends on your unique priorities in retirement. If maximizing your monthly income is a top priority, delaying filing until age 70 could be the best option. The average retiree can receive significantly higher monthly payments by waiting until this age. However, if early retirement is a priority, claiming benefits earlier may be a smarter choice, especially if you have other sources of income or are willing to make financial adjustments to retire in your early 60s.
Considering your health and life expectancy is also important when deciding when to claim your Social Security benefits. Claiming early may be beneficial if you anticipate a shorter lifespan, as you may receive more in total benefits over a shorter period. Ultimately, while delaying benefits until age 70 can be financially advantageous, it’s essential to consider all aspects of your retirement goals and priorities when making this decision.