When it comes to retirement income, the decision on when to start receiving Social Security benefits is crucial. Although you can claim benefits as early as the age of 62, your monthly benefits will be higher the longer you wait (up to the age of 70). Therefore, it is important to take into account your circumstances before making a decision. There is ongoing debate about the optimal time to start taking Social Security, and there are both advantages and disadvantages to claiming early or delaying benefits.
However, there is one age that may be a suitable option for many individuals: full retirement age (FRA). Your FRA is the age at which you will receive the full amount of benefits you are entitled to based on your work history and earnings. For those born in 1960 or later, the FRA is 67.
Claiming at your FRA can be a reasonable compromise between filing early and delaying benefits, making it a favorable choice for those who are uncertain about when to claim. At age 62, filing for Social Security benefits may result in a permanent reduction of up to 30%. While this can be a good decision for individuals wanting to retire as early as possible, it may make it more challenging to afford a comfortable retirement, particularly if savings are insufficient.
Waiting until age 70 will provide you with the maximum monthly payments. However, not everyone can wait that long to start receiving benefits and waiting until age 70 may not be ideal if you develop health issues in your early 70s and miss out on valuable retirement time.
By claiming Social Security at your FRA, you can enjoy the benefits of both claiming early and delaying benefits. You will receive larger payments than if you were to claim at age 62, but you will also have more time in retirement compared to waiting until age 70.
However, it’s important to note that there is no definitive answer as to when you should file for Social Security benefits. While claiming at your FRA may be a suitable choice for those who are undecided, it may not be the best option if you have specific financial goals. For individuals who want to maximize their monthly earnings, waiting until age 70 may be more beneficial, as it provides the full benefit amount plus additional income. Alternatively, if your main goal is to have more time in retirement, claiming at age 62 may be preferable.
Ultimately, the best age to claim Social Security depends on your unique circumstances and objectives. By considering your goals and weighing the pros and cons of claiming at different ages, it is possible to make an informed decision that meets your needs.