One of the biggest decisions seniors will make when it comes to retirement is when to start taking Social Security. Most people become eligible for those benefits when they turn 62, and that is by far the most common age at which to file for them.
That’s actually a great option for some seniors, but personal finance is personal. Your specific circumstances and needs will determine when you should claim.
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That said, I believe there are really four ages anyone should consider. Here’s a rundown of which people each one makes the most sense for.
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1. The month you’re first eligible for survivor benefits
If you are a widow or widower, you can become eligible for Social Security retirement benefits when you’re as young as 60. This is the earliest age at which you can claim survivor benefits based on a deceased spouse’s earnings record. If you’re divorced, you may also be eligible for survivor benefits if you were married to your former spouse for at least 10 years and remain unmarried after that until you turn 60.
Survivor benefits can be worth as much as what your late spouse collected prior to passing away. If they hadn’t started benefits, you’re entitled to receive up to the amount they would have received at the age they passed or at their full retirement age, whichever is greater. However, you’ll have to wait until your full retirement age to collect that much. Claiming those benefits earlier will reduce the size of your monthly checks.
But there’s a special rule for widows and widowers: They can claim either their survivor benefit or their own retired worker benefit, but even after they do so, the unclaimed benefit will continue to increase in value based on their rising age. So, it often makes sense for someone to claim their survivor benefits as early as 60 (or as soon as they become eligible) and then switch to their personal benefit when it maxes out at 70. It could also make sense to claim your personal benefit at 62 (or whenever you become eligible for survivor benefits) and wait for the survivor benefit to max out when you reach full retirement age before switching.
2. 62 years old
As mentioned, widows and widowers may be best off claiming their personal benefits as soon they’re eligible. However, another large group of seniors could also benefit from claiming as early as possible: lower-earning spouses.
A common strategy for maximizing a household’s expected lifetime income from Social Security is for the lower-earning spouse to claim their personal benefits at 62. Lower-earning spouses may see a boost in their benefits once their higher-earning partner claims Social Security thanks to spousal benefits. They may also get a bump from survivor benefits (hopefully much later in life).
Though 62 is usually the optimal claiming age for lower-earning spouses based on average life expectancy data from the Social Security Administration, it might make sense to delay taking benefits if you can reasonably expect to live longer than average. Since many people view Social Security as insurance against the possibility that they will outlive their retirement savings, it’s certainly rational to ignore the averages and wait to claim at an age that will maximize your lifetime income if you live into your late 80s or even your 90s.
3. Full retirement age
Your full retirement age is the age at which you become eligible for the maximum spousal or survivor benefit. If you expect to claim spousal benefits or eventually switch to them once your partner starts collecting Social Security, claiming at this age makes the most sense for people who expect to live a long life or want to protect their finances in such a scenario.
Your full retirement age will be between age 66 and 67 depending on when you were born. Those born in 1954 or earlier reached full retirement age at 66. The age increased by two months for each year someone was born after 1954 until maxing out at 67 years old for anyone born in 1960 or later.
Lower-earning spouses looking to protect their finances against longevity will have to decide whether it makes sense for them to claim benefits at full retirement age with potential spousal benefits, or wait until their personal benefits max out later at 70 — the last reasonable age to consider taking Social Security. There are numerous online calculators that can help you evaluate that decision.
4. 70 years old
Your personal Social Security benefit maxes out when you turn 70. Every month you delay your personal benefits beyond your full retirement age will increase your monthly check by 2/3 of a percentage point (relative to your primary insurance amount). That means someone with a full retirement age of 67 would get a 24% boost to their monthly benefits by waiting an extra three years.
On average, it pays to wait to claim benefits. The expected lifetime income for someone with an average lifespan is greatest when they claim their personal benefit at 70 compared to any other age of eligibility. That’s why it makes sense for individuals without a spouse to wait.
The impact of survivor benefits on a spouse’s options makes delaying until 70 an even better deal for high-earning husbands or wives. Since a benefit that’s based on the higher earner’s income history could continue to be paid well beyond their own death, the expected total value to be gained by their delaying when they file for benefits is even greater.
While 70 is touted as the optimal age to claim Social Security benefits, that’s not true for everyone. The claiming decision can be more complex for low-earning spouses as discussed above. There are reasonable cases a person can make to claim at any of the above ages, and they’re all worth considering based on your personal circumstances.
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