Seattle, Washington – Deciding when to start taking Social Security benefits is a crucial financial decision that can impact your income for the rest of your life. It’s important to carefully consider all factors before making this choice, especially if Social Security will be a significant part of your retirement income.
The optimal age to claim Social Security benefits varies from person to person, depending on individual circumstances. Research can provide valuable insights into the best and worst ages to start claiming benefits, helping individuals make informed decisions.
One key factor to consider is how your age at filing affects your monthly benefits. Filing at your full retirement age (FRA) will ensure you receive the full benefit based on your work history. While the FRA is 67 for those born in 1960 or later, filing earlier at age 62 can result in benefits being reduced by up to 30%, while delaying until age 70 can increase benefits by at least 24% per month.
Once you start receiving Social Security benefits, the adjustments to your income are permanent, barring any cost-of-living adjustments. It’s essential to carefully weigh the decision on when to file to maximize your lifetime income from Social Security.
Research by United Income in 2019 revealed interesting insights into retirees’ claiming decisions and their income for the rest of their lives. The study found that waiting until age 70 to claim Social Security benefits was the most optimal choice for maximizing lifetime income, despite being the least popular age to file.
On the other hand, claiming benefits before age 64 was deemed the least optimal, with only a small percentage of retirees maximizing their lifetime income by filing at ages 62 or 63. Filing at the optimal age can make a significant financial impact, with retirees potentially missing out on around $111,000 in total income over their lifetime by claiming at a less-than-ideal age.
Determining the best age to claim Social Security benefits is a personal decision that depends on factors such as your financial goals, health, and retirement timeline. Delaying benefits until age 70 can lead to higher monthly income, while claiming early can help achieve early retirement goals. Health considerations should also play a role in the decision-making process, as those with concerns about longevity may benefit from claiming benefits early.
In conclusion, while delaying Social Security benefits until age 70 can be a smart financial move, it’s essential to consider all aspects of retirement planning when deciding on the best age to start claiming benefits. By taking a comprehensive approach to retirement planning and understanding your priorities, you can make an informed decision that aligns with your financial goals and circumstances.