Key Points
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Most people reach full retirement age at around 67. This is when you qualify for 100% of your scheduled benefits.
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When deciding the best time to claim Social Security, consider your health, longevity, and income needs.
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Coordinating Social Security benefits with savings, pensions, and other income can improve your retirement plans.
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As you approach 67, you face big decisions, some of which involve Social Security. Those decisions can shape the rest of your retirement, as well as the benefits available to a spouse who chooses to claim Social Security spousal benefits. Your decisions will also determine how much money you or your spouse has available when the other passes away.
The best move is to learn as much as possible, so you’re prepared to make decisions you won’t regret. It begins by asking yourself a few questions.
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Do you want to work past full retirement age?
Although you’re eligible to claim Social Security benefits as early as age 62, full retirement age (FRA) for those born before 1960 is between 66 and 67. For anyone born in 1960 or later, FRA is 67.
If you decide to wait past FRA, the math works in your favor. For each year between age 67 and 70, your benefits are boosted by roughly 8%. This means a $1,000 retirement benefit becomes $1,240, a $2,000 retirement benefit grows to $2,480, and so on.
The big decision of whether to claim at FRA or wait until 70 involves weighing the trade-off between three more years of higher future income, or three years of foregone Social Security payments.
Do you understand how your benefits are calculated?
The Social Security Administration (SSA) looks back at your 35 highest-earning years, indexed for inflation, to calculate your average indexed monthly earnings (AIME). That AIME is calculated using a progressive formula with “bend points” to determine your primary insurance amount (PIA).
Note: While bend points may sound confusing, they’re simply the dollar thresholds the SSA uses to ensure that lower lifetime earners receive a larger percentage of their past income back in benefits than high lifetime earners do.
Do you want to continue working?
Unlike younger Social Security recipients, once you reach age 67, you can earn any amount from work without having benefits withheld. If you claim before age 67, benefits can be temporarily reduced if wages exceed annual limits. At 67, however, you’re free to continue to work without such a reduction — no matter how much you earn — and you also start getting back the money you may have lost if benefits were temporarily reduced.
When it comes to Social Security, there are no one-size-fits-all guidelines. The right time for one person to claim Social Security may be entirely wrong for another. However, the more you understand about how it works, the better prepared you can be to make decisions you’ll be happy with for decades.
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