What is the best age to file for Social Security? What factors should you consider when making the decision to claim your Social Security benefits? It can be confusing and Social Security claiming mistakes are common.
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What’s the Best Age to Claim Social Security: 62, 66, or 70?
One of the most important decisions retirees face is determining when to start claiming their Social Security benefits. With various options available, the question arises: what is the best age to claim Social Security? Will you be better off starting at 62, full retirement age (FRA), or at the maximum age of 70?
Many factors go into making this decision. It is crucial to consider financial circumstances, health and longevity prospects, and individual needs and preferences. By understanding the advantages and disadvantages of each age, retirees can effectively plan for a financially secure retirement.
Starting at 62
For many individuals, claiming Social Security as early as possible, at 62, seems enticing. After all, who wouldn’t want to receive money earlier and enjoy retirement sooner? However, there are some downsides to this choice.
The first and most significant disadvantage is a reduction in lifetime benefits. By claiming early, recipients will receive lower monthly payments compared to waiting until FRA or beyond. This reduction comes as a result of claiming before reaching FRA, which is typically between 66 and 67, depending on the year of birth. Consequently, starting at 62 means accepting a permanent reduction in benefits.
Starting at FRA
Full retirement age serves as a turning point for those considering Social Security benefits. At this age, individuals become eligible to claim their full benefits without any deductions. While there is no reduction in monthly payments, the decision to start during this period also has consequences.
Claiming at FRA provides the advantages of receiving your full benefit amount and potentially avoiding reductions. However, it is essential to understand that waiting until FRA means receiving fewer monthly payments overall compared to starting at 62. So, recipients must determine whether it is more beneficial to receive a lower monthly payment for a longer duration or a higher payment for a shorter period.
Starting at 70
Lastly, there is the option of delaying Social Security benefits until the age of 70. By waiting until this point, recipients can maximize their monthly payments, leading to higher lifetime benefits. For each year beyond FRA, there is an 8% increase in benefits until reaching the maximum at 70.
Delaying benefits until 70 can be a wise choice for those in good health and with longevity in their family history. If you expect a longer lifespan, the increased payout from waiting can ensure a more secure retirement. However, it is important to weigh the financial benefits against personal circumstances, including health and financial stability.
Which age is best?
Ultimately, determining the best age to claim Social Security is highly individualized. It depends on factors like lifespan expectations, current financial needs, and intended retirement lifestyle. Consulting with a financial advisor or utilizing Social Security calculators can help retirees make an informed decision.
Remember that no matter when you choose to claim Social Security, it is a decision that will shape your financial security throughout retirement. Taking into account all relevant factors, it is advisable to carefully consider all options and choose the age that aligns best with your unique circumstances.
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Is this money added to your income and taxed?
62! Takes approximately age 77 to break even, if you live into 80’s? Then wait, is better. Most take money at 62.
France wanted to raise the retirement age and everyone got in the street to stop it. We should have done that 30 years ago. GD these spineless politicians who funded wars for oil and then gutted Social Security.
Every persons situation is different. I declined my spousal pension benefit and took my full pension. We take her SS benefit which is much less than what mine will be. Delayed my SS which she can claim if I die before her. Don't need the money and it grows at 8% per year!
I love the well-rounded approach, including psychological and spiritual. But to add to another comment, retiring outside of the US will solve a lot of your problems and you can just have your social security check direct deposited into your US Bank that you keep and withdraw cash from ATMs.
I've akso done a lot of house and pet sitting which is one of the ways of thinking outside of the box. I live in sometimes wonderful places, much bigger and nicer than I could afford alone, have free rent and utilities and sometimes pay and a car included, and get to be with wonderful animals. This is big business in the USA and you can make a lot of income from it and are usually paid cash with no paper trail.
You can travel internationally and do it as an exchange and it ends up being cheaper to travel than to stay home and pay for all your overhead, especially in California where I was.
If you own US property you could also rent it out or do it as an Airbnb and get a lot more per month then you would be paying for rent in developing countries, but also all of Eastern Europe and even some of Western Europe and nations on every continent. Even eating out everyday would be cheaper than cooking at home in the US in many places. To maintain my health and a pain-free body I get wonderful massages in Thailand for $10 an hour compared to 100 an hour or more in the US. And I could be facing an exquisite beach Vista at the same time outside under the canopy of jungle trees.
In many countries the healthcare is excellent and very cheap so even though you wouldn't be able to use your Medicare you can pay out of pocket or get affordable health insurance in your country of residence.
In addition I have numerous ways I can make money online part-time with my former full-time business which I can do remotely, or side hustles and there are countless ones, especially on YouTube.
what quality of life are you going to enjoy at 80 and above i took mine at 62 and never looked back
If there is a surplus of SS that doesn’t get paid out, what does our government do with it?
Why is their talk of a shortage, when there is a surplus???
No analysis of when to take SS is complete without considering the delta of the net after tax value of taking payments at an earlier time vs those taken at a later time. For example, if your payments total $25k/ann at age 62 vs $33k at age 66, the total of $100k received during those years not waiting would have compounded to $110k and would earn $8k/ann if invested at 7%. Annuitize it and the money returned is even greater, $10k, maybe $12k/annual on top of the $25k nicely beats the waited for $33k.
What happens to the left over money that u put in & die before getting it.
If you are going to account for COLA for the person that filed at age 70, then you must also acknowledge that at age 70, the individual who claimed at 62 would be making substantially more than the $1997 than he made when he first started taking at 62 (due to COLA)
I'm 62 and drowning spousal benefits was getting 600 till january2017 I lost my dissiable
Great video Thanks for putting these out very good information.. I am 99% sure I'm going to start drawing at 62 which is coming up for me. I'm going to start drawing before they do make any age changes to the rules. I do have other sources of income in place to supplement or actually the SS will be a supplement..
It would be interesting to know for the average person if there is such a record anywhere If you start at 62 how much do you draw before you pass. If you start drawing at 67 how much do you draw out before you pass. If you draw at 70 what is the amount you draw before you pass.
What I'm talking about is the overall average. It would just be an interesting stat to know.
With the amount I will receive at 62 It would take me till 74 roughly 12 years before I get to the break-even point.
If I start it at 70 My break-even point would be
80 1/2..
For me it's a no-brainer I believe unless someone explains something different to me. I understand everyone's situation varies.
This will be a supplement to what I've already set up. I just feel like you're going to enjoy yourself a lot more at a younger age than retiring at a much higher age.
It would be interesting to know those stats if anyone has them or if they even exist anywhere.
Like I say the average taken out of SS for someone that takes it at 62 / 67 / 70
I'm not sure if I would let that factor in on my thought process but it would still be interesting to know. Maybe still retire and put a delay on when you draw but I don't even think that makes sense.
I just had a good friend of mine same age diagnosed with colon cancer. Chances are he'll never draw a penny from SS unless he gets disability with time running out. It's all a gamble and it seems like rather than taking the gamble started up at 62 if you do have other sources of income or maybe even if you don't depending on your situation. That's just my thought process Maybe I'm totally off base and wrong.
Thanks again for your videos They're very informative and it does help reinforce decisions you make about your retirement!!
The only other challenge that's huge is going to be the health care part. I guess the government health insurance program is going to be the way to go. Unless I work something out with my work for them to supply me with insurance and I would do some remote work for them.
I'm sure that amount is going to count as active income. Thx ✌️
What if a man not been able to work. And got ssi?
I took mine at 63 years 4 months. Don’t regret it. I planned, have other pension income so as is said here by others, it takes years to recoup those funds you leave on the table by waiting. The gov tries to get you to wait for full Ret age… sure they do.
Taking at 62 vs. FRA vs. 70 impacts the spouse survivor benefits and yet this is never covered in detail. Also never covered in detail is the married couple considerations, e.g. my wife is younger and so her FRA is later than mine, and 77 vs. 66-8. In addition there is the medical coverage for her up to 65 to factor in, as she is on my health coverage. All in all most articles and videos are not touching on all of these important considerations. Does your assessment go into the full level of details for a married couple?
67 here; haven't tapped SS yet, (don't need to) but….from ages 66 to 70, I gain 8% PER year. I GAIN More than $400+/mo. per month, $5000+/Yr. minimum…..for the remainder of my Life. For me, it's totally worth it; that coupled w/ moving to a foreign country/LOWER cost of living is part of my plan.
I’m claiming at 70. I’m going to work full-time until age 72. I need all the money. No question for me. I’m going to live to 100. Interesting info on when the SS fund is depleted. Good info – thx
Does SSA use the best sequential 35 years? or is it the top 35 years taken from one's entire work history?
Hello Lane. I turn 62 in September. I am still working and make pretty good money (90K+). Are the 35 best years calculated by tax returns? If I wait until Jan or Feb of the following year in order to get one more "good" tax return on the books to boost the benefit?
If you can wait, the best age to file is 70. You get Double and then some on what you get at 62. My dad starting collecting last yr at 70. He gets like the Max..3,600 or so a month. And he's luvin every minute of it.