Statistics Say: This Is the Best Age to Claim Social Security

As you approach and enter your 60s -- or, possibly, your 50s or even your 40s -- you'll likely be thinking about retirement and trying to pinpoint the best time to retire. It's a huge decision, and an important factor in your decision-making should be when you plan to claim your Social Security benefits.

Think through the Social Security when-to-claim question carefully, as when you turn on that spigot has some important ramifications. Here's some information that can guide you in your thinking.

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What's your full retirement age?

Each of us has a "full retirement age" at which we can start collecting the "full" benefits to which we're entitled based on the Social Security Administration's record of our earnings. For most of us, that full retirement age is 66 or 67 -- it's 67 for those born in 1960 or later.

Here's why your timing is important: If you start collecting benefits early, you'll receive smaller benefit checks -- but many more of them. If you delay beyond your full retirement age, your benefit checks will grow by about 8% per year up to age 70.

What's the best age at which to claim Social Security benefits?

Before deciding when to claim your benefits, review the considerations below. (You might end up deciding to compromise and claim them right on time, at your full retirement age!)

• Your health: Healthy folks can be more likely to live longer-than-average lives, so for them, claiming later is better. If you're not in great health, though, and stand a decent chance of living a shorter-than-average life, claiming early can be the best move.
• Your lifespan: Those who live very long lives can run the risk of running out of their savings too soon. By delaying and thereby maximizing your Social Security benefits, you'll set yourself up for more income in your later years, when your nest egg may be small.
• Your working status: If you're still working and you claim your benefits before your full retirement age, $1 will be withheld for each $2 you earn above a certain threshold. In the year you reach your full retirement age, that withholding falls to $1 of every $3. But don't despair -- those withheld benefits end up factored into your future benefits, so they're not permanently lost.
• Inflation: If you're worried about inflation, you might want to delay claiming, to maximize your benefits. That's because Social Security features nearly annual cost-of-living adjustments (COLAs). The bigger your initial benefit, the bigger each year's increase will be.
• Your investments: If you claim your benefits early, that can help you to not tap your nest egg as much, permitting it to grow more. Delaying claiming can have you depleting your nest egg faster if you're not working -- though it will also result in bigger checks.
• Social Security's stability: Social Security is not exactly running out of money, but it is facing a shortfall in the coming years. If nothing is done to strengthen Social Security (and there are multiple ways to do so), within a decade, beneficiaries will be collecting only 83% of their due. Meanwhile, the Trump administration is proposing actions that could hurt the program's long-term viability. So Social Security's future is less certain than it was a few years ago. Thus, some folks may opt to claim their benefits early to start collecting that income as soon as possible.
• How soon you need the income: If you simply need income as soon as possible, perhaps because you've involuntarily retired early due to a job loss or a health setback, claim early. Some might need to claim early in order to have income until they can sign up for Medicare at 65. (The cost of healthcare should be a major factor in every retiree's budget.)
• Your plan with your spouse: If you're married, the two of you should come up with a joint plan for when each of you will claim your benefits. For example, the higher earner might try to delay claiming until age 70, while the lower earner collects earlier. This can supply some income early, while you let the bigger benefit keep growing -- so that when one spouse dies, the survivor will get to keep that maximized benefit.

Studies say...

These are the kinds of things you need to consider, but you might also want to see what some researchers have learned. For example, a 2019 study, "The Retirement Solution Hiding in Plain Sight: How Much Retirees Would Gain by Improving Social Security Decisions," from United Income, found that:

• Millions of people claim their benefits too early, leaving trillions of dollars in potential total Social Security benefits on the table -- an average of $111,000 per household.
• The average retiree would collect about 9% more retirement income from Social Security if they claimed their benefits at an optimal age.
• Only 4% of retirees seem to have claimed their benefits at the best time.

Meanwhile, a 2022 working paper from the National Bureau of Economic Research offered this:

We find that virtually all American workers age 45 to 62 should wait beyond age 65 to collect. More than 90% should wait till age 70. Only 10.2% appear to do so. The median loss for this age group in the present value of household lifetime discretionary spending is $182,370."

So there you have it. Most -- but not all -- of us will get the most from Social Security if we can delay claiming our benefits until age 70. With Social Security's future seeming a bit uncertain, though, it's smart to keep up with developments and perhaps adjust your expected claiming date accordingly, if needed.

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