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You can do hardly any learning or thinking about Social Security, and when you eventually apply for your benefits, you’ll get what you get. For better results, though, take some time to learn more about the vital program that provides about 30% of the average elderly person’s retirement income.
One decision you’ll want to make carefully is when to start collecting your Social Security benefits, as your timing will affect the size of your checks. Delaying until age 70 will produce the fattest checks, but for many people, it makes a lot of sense to start at age 62.
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Early, late, less, more
The first thing you should know is that each person has a “full retirement age” — the age at which you can start collecting the full benefit to which you’re entitled, based on your earnings history. For most people, that full retirement age is 66, 67, or somewhere in between.
You can start collecting your retirement benefits as early as age 62, though, and as late as age 70. The table below shows what percentage of your full benefits you’ll receive, depending on when you start collecting:
Start Collecting at:
Full Retirement Age of 66
Full Retirement Age of 67
62
75%
70%
63
80%
75%
64
86.7%
80%
65
93.3%
86.7%
66
100%
93.3%
67
108%
100%
68
116%
108%
69
124%
116%
70
132%
124%
Source: Social Security Administration.
Clearly, delaying until age 70 offers the biggest bump — enlarging your checks by more than 75% compared to age 62.
The No. 1 reason to claim social security at age 62
Despite that 75% bump for waiting from 62 to 70, though, there’s an excellent reason to start collecting at age 62 — because you have to. Here are some circumstances that might lead you to start collecting early:
You end up retiring earlier than planned because you lost your job. This happens to lots of people.
You end up retiring ahead of schedule because you or a loved one experience a health setback that takes you out of the workforce.
You don’t have enough money saved and need that income as soon as possible. Millions are in this situation. According to the 2022 Retirement Confidence Survey, 34% of workers report that the total value of their savings and investments, excluding the value of their primary home, is less than $25,000. Even worse, roughly 1 in 5 people have less than $1,000 saved.
You’re not in great health and have relatives who have died relatively young. In other words, you stand a decent chance of living a shorter-than-average life.
Before you start lamenting all the money you’ll leave on the table by starting to collect your Social Security benefits early, know this: You probably won’t be forfeiting as much as you think. That’s because while starting to collect earlier will get you smaller checks, you’ll receive many more of them. And if you delay to age 70 to maximize your checks, you’ll still collect fewer of them, overall.
In fact, the system is designed so that for those who live average-length lives, it won’t matter much when they start collecting — it will be roughly a wash in terms of total dollars received.
When to delay starting to collect Social Security
So don’t feel too bad if you have to start collecting your Social Security benefits early and you’re stuck with smaller checks than you’d hoped for. If you’re collecting them starting at 62 instead of 67, you’re getting 60 more checks — and 96 more checks than if you started at age 70.
Still, for many people, delaying until age 70 is smart. For example:
You stand a good chance of living a longer-than-average life.
You’re able to keep working until age 70.
You may retire before age 70, but you have other reserves to tap until age 70.
Crunch the numbers for yourself and see what makes the most sense for you.
The $18,984 Social Security bonus most retirees completely overlook
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