62 Is the Most Popular Social Security Filing Age. But Will That Change?

Millions of retired seniors collect a monthly paycheck from Social Security. And while the amount of that paycheck hinges on factors such as lifetime earnings, for many recipients, it’s lower than it needs to be.

The reason? Age 62 has long been the most popular age to file for Social Security. But filing that early comes at a cost.

For each month seniors claim benefits before reaching full retirement age (FRA), which is 67 for those born in 1960 or later, their benefits are reduced. Filing at age 62 with a FRA of 67 means taking a 30% hit on benefits for life.

Recently, inflation levels have soared to the point where seniors who get most or all of their income from Social Security can’t keep up. And that begs the question — will fewer seniors start claiming benefits as early as possible now that living costs have gotten much harder to keep up with?

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The case for filing at FRA or beyond

The logic behind claiming Social Security at 62 is clear — it allows seniors to access their money sooner. For some, that means being able to retire early, which could also translate to being able to leave a stressful career behind.

But in light of rampant inflation, we could, in the coming years, see fewer seniors claim Social Security at age 62 and instead file at a later age, thereby locking in higher benefits for the rest of their lives. In fact, we could see an uptick in retirees who wait beyond FRA to sign up for Social Security.

For each year seniors delay their Social Security filings past FRA, their benefits get an 8% boost. This incentive runs out at age 70, so there’s no sense in delaying a filing beyond that point.

Generally, only a small percentage of Social Security recipients file for benefits at age 70 each year. But that could change as seniors face the reality of soaring expenses.

Social Security cuts could also have an effect

As it is, Social Security will only replace about 40% of the average wage-earner’s pre-retirement income. But now that benefit cuts are on the table, in the future, Social Security might provide even less replacement income in the future. That, too, could motivate more people to hold off on claiming benefits rather than rushing to file at age 62.

Of course, some seniors might go the opposite route and try to claim benefits before they’re subjected to further reductions. But it’s possible that some might try to minimize the hit to their benefits at a time when cuts are being introduced.

An important decision to make

All told, filing for Social Security at age 62 isn’t a poor choice for everyone. But it’s generally not ideal for those who don’t have a lot of savings and need those benefits to cover the bulk of their expenses.

It’s easy to see the appeal of claiming Social Security as early as possible. But recent events could spark a shift that leaves more people signing up at a later age.

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