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The fact that seniors get a choice as to when they claim Social Security can be both a good thing and a bad thing. On a positive note, choosing your filing age means getting to do what’s best for your personal financial circumstances. On the flipside, having to land on your own filing age can be stressful. And it could also open the door to you making the wrong decision.
The earliest point you can sign up for Social Security is age 62. And the latest age seniors are advised to sign up is age 70, even though it’s technically possible to claim benefits beyond that point.
Clearly, that’s a pretty wide range of ages to choose from. But here’s why you may want to settle on age 65.
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A middle ground solution
The monthly benefit you’re entitled to from Social Security will be based on your personal earnings history. And you can collect that benefit in full once you reach full retirement age, or FRA.
FRA kicks in at 66, 67, or 66 and a certain number of months, and your precise FRA will hinge on the year you were born. If you claim Social Security before FRA, your monthly benefit gets reduced on a permanent basis. Delay your filing past FRA, and your benefit gets a boost that stays with you for the rest of your life. Once you turn 70, you can’t grow your benefit any more, though, which is why that’s generally considered the latest age to file.
Now as you might imagine, age 62 is a very popular age to sign up for Social Security because it’s the soonest seniors are able to get their money. But filing for benefits at 62 means slashing them substantially.
Meanwhile, seniors who delay their filings beyond FRA are rewarded with higher benefits. But let’s face it — delaying your filing might also mean delaying retirement altogether, and that may not be ideal.
That’s why signing up for Social Security at age 65 is a move worth considering. While you’ll lose a portion of your monthly benefit due to signing up before FRA, you won’t face nearly as extreme a hit as you would by filing at age 62.
Just as importantly, you won’t have to wait too long to get your money. If you’ve saved nicely for retirement but need some income from Social Security to manage in the absence of a job, filing at age 65 could make it possible to enjoy your newfound freedom — before health issues start to arise.
Plus, age 65 is when Medicare eligibility kicks in. And while you can absolutely enroll in Medicare without Social Security, you may also find that it’s just plain convenient to sign up for both at the same time.
What’s the right choice for you?
Not everyone should sign up for Social Security at age 65. If you’re nearing retirement with little to no money in your nest egg, then you’ll probably want to wait until FRA or even later to file for benefits. But if you’re approaching your senior years in a reasonably strong financial spot and want to leave your career behind in your mid-60s, then claiming Social Security at 65 could end up working out well for you.
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