Income

This Is When You Should File For Social Security

Kristin Hitchcock

Published: April 13, 2024 2:30 pm

A recent explainer by the Social Security Administration revealed a fascinating trend: the average filing age for Social Security benefits has been steadily climbing. However, many retirees still claim Social Security before qualifying for maximum benefits.

Waiting for maximum benefits makes complete sense in a logical world. However, we often don’t live in a logical world. And, let’s face it, retiring early is sometimes too hard to pass up!

Despite common misconceptions, there’s no single “ideal” age to file for Social Security; the optimal timing hinges on individual circumstances like health expectancy, desired lifestyle, and alternative retirement income sources.

Some people may want a lavish retirement lifestyle, encouraging them to retire later for a higher payout. Others may have many income sources, allowing them to retire early without much financial distress.

What works best for you depends on your particular situation. Let’s have a look at how you can figure out the best age to claim Social Security.

First: There is No One-Size-Fits-All Age

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If you’ve read anything about Social Security, you’ll probably be familiar with Full Retirement Age (FRA), the age at which you become eligible for “full” Social Security benefits. (If you aren’t, check out our Social Security hub for an explanation.)

For those born after 1960, the Full Retirement Age is between 66 and 67 years old. However, the good news (or perhaps the cause for confusion) is that you actually have some flexibility. The FRA should be considered the “baseline” for your benefits. It’s when time-related factors aren’t applied to your monthly benefits.

However, you can claim benefits as early as 62 or delay them as late as 70 (technically, you can continue to delay them, but your benefit doesn’t increase after 70).

Your FRA probably isn’t the best age to claim Social Security.

While there is a wide window you can claim in, that doesn’t mean that when you claim doesn’t matter. It absolutely does. It just means that your “best time to claim” is between the ages of 62 and 70, depending on specific lifestyle factors.

When you claim in relation to your FRA, it greatly impacts your monthly benefit. Claiming early means that your monthly benefit will be reduced permanently. It doesn’t go back up when you reach FRA. Claiming later results in a permanently boosted monthly benefit, as you’re spreading the same amount of money over fewer months.

3 Factors Influencing Your Optimal Filing Age

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To wrap up the last section, you can claim Social Security anytime between 62 and 70+. However, when you should claim is based on these factors:

1. Life Expectancy

You preferably want to retire and file for Social Security with plenty of healthy years ahead of you. Of course, we all know this doesn’t happen to everyone. Some people claim far too late or never get to claim at all!

It’s important not to get stuck in the “just one more year” trap. Yes, waiting until age 70 will allow you to maximize your benefits. However, we don’t recommend retiring at 70, as you probably won’t have that many healthy years left. According to the CDC, the average life expectancy in the US is only 76.1 years, and it’s only dropping.

If you claim too late, you may end up getting less money overall.

There are many factors affecting life expectancy, too. For instance, men don’t live as long as women. Therefore, if you’re male, it may make sense to claim at FRA or even sooner, especially if you already have a medical history.

2. Desired Retirement Lifestyle

Retirement can mean many different things to different people. Some people simply want to relax and spend their days reading, while others want to spend their days traveling around Europe. Of course, these two different retirement styles require vastly different amounts of money!

The retirement lifestyle you’re imagining should directly influence your filing decision. If you plan on having a high-cost retirement, you may need to delay your benefits to maximize your monthly payout. Otherwise, you may find yourself coming up short!

On the other hand, if you want to spend your days babysitting the grandchildren, claiming earlier may not impact your dream much at all. (And you’d have more time to live your dream!)

3. Alternative Retirement Income Sources

Social Security may be a vital component of retirement income for many people, but it should not be your only source of income. Retirement savings accounts, pensions, and other income streams should be considered when deciding when to file for Social Security.

If you have a robust retirement portfolio, claiming early may not impact your financial outlook all that much. However, if you’re still working on your retirement savings, you may need a few more years of work to be financially secure!

Pros and Cons of Filing Early Or Late

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Now that we understand the key factors influencing your optimal filing age, let’s delve into the specific advantages and disadvantages of each claiming option. We have an in-depth guide to the maximum benefits eligibility by age that we also recommend checking out before making your decision.

Claiming Early (Age 62)

Claiming early provides financial security and helps bridge the gap to other financial options. You can start retirement early, providing you with plenty of flexibility.

However, your monthly benefit will be permanently lower. You may find your monthly benefit seriously impacted. If you live a long life, you might receive less total benefits than delaying your claim.

Claiming at Full Retirement Age

When you claim at full retirement age, you receive the full amount of money you’re entitled to – no more, no less. Many people recommend waiting until at least full retirement age if you don’t want to “miss out” on money. However, you don’t always get more money overall by waiting until full retirement age. Sometimes, you get more money by retiring sooner.

That said, you may have plans to retire before your full retirement age. For individuals with a shorter life expectancy, claiming earlier can provide more total benefits despite the reduction.

Claiming Late

Each month you delay after your full retirement age, you increase your monthly benefit permanently. Therefore, the longer you wait, the more you can expect your monthly payout. If you plan on having a longer life expectancy, claiming later will result in more lifetime Social Security earnings than other options.

However, if you don’t live long enough, you may actually receive less total benefits by claiming later. You may have to rely on other income sources for longer before receiving Social Security benefits.

Making an Informed Decision

Choosing the best age to file for Social Security can be challenging. Retiring early allows you to be retired for longer (and work for a shorter period). Retiring later increases your monthly benefit permanently. Both of these benefits seem pretty great, but you do have to pick only one.

In the end, it depends on your specific situation. Do you need monthly payments sooner, or do you need them to be higher?

We highly recommend using the Social Security benefits calculator, which can help you play with different retirement dates and see how time directly impacts your monthly benefit. It isn’t always a 1:1 change.

For instance, your monthly benefit will increase more for each delayed month as you approach 70. However, it only goes up a little in the months directly after your full retirement age.

Remember, there is no one-size-fits-all answer. Consider your circumstances to make an informed decision about your Social Security benefits. You are entitled to Social Security benefits through taxes, but when you get these benefits is up to you!