Millions of Americans rely on Social Security as a primary income source in retirement. According to a 2024 report from the Transamerica Center for Retirement Studies, 43% of baby boomers expect it to be their main financial resource in their later years. But the age you claim your benefits significantly impacts how much you’ll receive—sometimes by hundreds of dollars per month. Here’s what you need to know.
How Age Affects Your Social Security Benefits
The age at which you claim Social Security benefits determines your monthly payout. If you claim benefits before your full retirement age (FRA), your checks will be permanently reduced. Conversely, delaying benefits past your FRA will increase your payments.
Understanding Your Full Retirement Age
Your FRA is the age at which you qualify to receive 100% of your earned benefits. This varies by birth year:
- Born in 1960 or later: FRA is 67.
- Born before 1960: FRA is 66 or 66 and a few months, depending on your birth year.
Claiming early—at 62, the earliest possible age—reduces benefits by 30% if your FRA is 67. Conversely, delaying until 70 increases payments by 24% above your FRA amount.
Financial Implications of Early vs. Delayed Filing
Choosing when to file has profound financial implications. According to 2023 data from the Social Security Administration, here’s how monthly benefits vary based on age:
- At 62: The average retiree receives $1,298 per month.
- At 67: Benefits increase to $1,884 per month—a difference of $586.
- At 70: Delayed filing results in an average benefit of $2,038 per month.
The Impact on Lifetime Income
Waiting until 70 to claim benefits can lead to significantly higher lifetime earnings. A 2019 study from United Income found that 57% of retirees would maximize their lifetime income by delaying benefits. On average, households could earn an additional $111,000 by filing at the ideal age.
Why Delaying Benefits May Not Always Be Best
Although delaying Social Security can provide higher monthly and lifetime income, it’s not always the optimal choice. Several personal factors may lead to an earlier filing decision:
- Health considerations: If you face significant health challenges or anticipate a shorter-than-average lifespan, claiming earlier may result in more total benefits over your lifetime.
- Spousal strategies: For couples, coordinating benefit claims can maximize household income. One spouse may claim early while the other delays to secure larger payments.
- Personal goals and priorities: Financial considerations aren’t the only factor. Some retirees may choose to claim early to fund specific retirement plans or enjoy their benefits sooner.
Finding the Right Balance for Your Retirement Goals
Choosing when to claim Social Security is a deeply personal decision that requires balancing financial strategy with individual circumstances. While delaying benefits often results in higher payouts, factors such as health, life expectancy, and family needs play a crucial role in determining the best approach. Consulting a financial advisor can help tailor your strategy to meet your retirement goals.
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