As retirement approaches, individuals face the important choice of when to start collecting Social Security benefits. Although the Social Security Administration allows claims to begin as early as age 62, the timing directly affects monthly benefit amounts. Starting benefits earlier results in reduced monthly payments, whereas postponing benefits can substantially increase the monthly income received.
Research analyzing Social Security claiming behaviors suggests there is an age that stands out as most financially advantageous, but the decision is rarely straightforward. According to a 2019 United Income study that compared claim ages with subsequent lifetime retirement income, only a small fraction of retirees—just 4%—actually claimed at the optimal age for maximizing their overall benefits. This suboptimal timing results in an average loss of approximately $111,000 in lifetime income for retired households.
The study highlights that filing before age 64 is generally the least favorable strategy for maximizing lifetime Social Security earnings. Only 6.5% of retirees who filed early optimized their lifetime income. Conversely, waiting until age 70 to claim benefits appears more advantageous, with 57% of retirees potentially increasing their total benefits by delaying.
Delaying benefits until age 70 leads to notably larger monthly payments. Data from the Social Security Administration for 2024 reveals that retirees who wait until age 70 collect, on average, around $800 more each month compared to those filing at age 62. This differential accumulates to nearly $10,000 annually, a significant gain in retirement income.
Despite these financial incentives, the optimal claiming age depends heavily on individual circumstances and priorities. Financial calculations alone point to age 70 as the best choice to maximize Social Security income, but other elements such as personal health, quality of life, and career satisfaction influence this decision.
For instance, if continued employment negatively impacts health or well-being, starting benefits earlier and retiring sooner could offer better overall life satisfaction despite lower monthly payments. While this approach is less optimal from a purely financial perspective, improved lifestyle and health outcomes may outweigh the monetary downsides.
Similarly, some individuals prioritize enjoying retirement while they are younger and more active. Claiming benefits at the earliest age can facilitate this, even if it means accepting reduced monthly amounts. It is also recognized that many maintain active lives well beyond their 70s, but the decision to start benefits early can provide immediate financial flexibility attractive for those seeking more leisure or travel time during early retirement years.
Ultimately, determining the best time to claim Social Security benefits is a highly personalized choice. One helpful way to approach this decision is to consider which potential regrets would be more significant. For example, filing early and living significantly longer than average could result in financial strain if savings are depleted and Social Security payments are limited. Alternatively, delaying benefits and experiencing a short retirement due to health issues may mean not fully benefiting from larger monthly checks.
Both scenarios illustrate trade-offs that retirees must weigh, emphasizing that no one-size-fits-all solution exists. It is important for each individual to balance financial calculations with personal health considerations, quality of life preferences, and long-term retirement goals when selecting the age to commence Social Security benefits.