Seniors get plenty of choices when it comes to claiming Social Security. But certain ages are more popular ones to file at than others. Here are three filing ages you may be contemplating — and why each has its benefits and drawbacks.
1. Age 62
Age 62 is the earliest point at which you can file for Social Security. The upside of going this route? Getting your money sooner. The downside? Locking in a lower monthly benefit for life.
The monthly benefit you’re entitled to in retirement is based on your 35 highest-paid years of wages. But you don’t get that full benefit until you reach full retirement age, or FRA, which falls between ages 66 and 67, depending on the year you were born.
If you file for Social Security at age 62, you’ll reduce your monthly benefit by 25% to 30%, depending on your FRA. And nice as it may be to get your money early, that’s a hit you may not be able to afford to take.
2. Age 65
Age 65 is when Medicare eligibility kicks in. Because seniors commonly enroll in Medicare at that point, some opt to sign up for Social Security as well.
If you claim your benefits at age 65, you’ll clearly be looking at a reduction. However, that reduction won’t be as severe as the hit you’ll take for filing for benefits at age 62.
Furthermore, once you start collecting Social Security, you can have your Medicare Part B premiums deducted from your benefits directly. That saves you from having to manually make those monthly payments (though it is possible to set up an auto-pay from your bank account if you’re not on Social Security yet).
3. Age 70
Technically, you can file for Social Security at any age once you’re 62. But 70 is generally considered the latest age to sign up for benefits, because there’s no financial incentive to delay your filing beyond that point.
For each year you hold off on claiming Social Security beyond FRA, your benefits grow 8%. File at 70, and you’ll be looking at a 24% to 32% boost to that income stream.
Clearly, a higher Social Security benefit is a nice thing to lock in for life. But on the flip side, waiting until age 70 to file for Social Security could mean having to work longer when you’re ready to retire. Plus, you’ll run the risk of potentially passing away at a relatively young age, leaving you in a situation where you don’t collect as much lifetime income from Social Security as you would’ve by filing sooner.
What’s the right call?
Let’s be clear — you don’t have to file for Social Security at any of the ages above. You might choose to sign up for benefits at your precise FRA. Or, you might delay your filing a year past that point to give your benefits a little boost without having to wait too long to claim them.
There are pros and cons to signing up at any given age you might land on. The best you can do, therefore, is run through those advantages and drawbacks and hope they’ll lead you to the right choice.
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