Key Points
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Claiming at age 62 reduces a Social Security recipient’s benefits by 30%.
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For those with a shorter life expectancy, claiming at 65 may increase total lifetime benefits.
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For many, age 65 still feels like the “natural” time for them to retire.
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As you consider the best time to claim Social Security, it’s easy to turn to the “experts.” However, dueling opinions can leave you more confused than ever. One person says you should wait until age 70 to benefit from delayed credits. Another says you should take Social Security at age 62, as soon as you’re eligible.
The reality is there’s no one-size-fits-all formula for the right time to claim Social Security. Each age has pros and cons. Here we look at five reasons why making your claim at age 65 can work.
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Reason #1: Coordinating with Medicare
For decades, full retirement age (FRA) was 65. And for many, it still feels like a natural jumping off point for retirement. In part, that’s because 65 is the age when Medicare benefits begin. While planning for retirement, it makes sense to coordinate all retirement-related financial issues, including Social Security, Medicare, and retirement savings.
Reason #2: Immediate income needs
If you must replace wages quickly due to health issues, job loss, or involuntary early retirement, claiming at 65 provides income sooner rather than later. This new income source can help cover everyday living expenses.
Reason #3: Health and longevity concerns
If your personal health or family history suggests that you may have a shorter-than-average life expectancy, claiming Social Security benefits at 65 may increase total lifetime benefits, even though your monthly benefit amount is smaller. It may also allow you to collect Social Security while you’re still active and able to enjoy it.
Reason #5: Desire for a pragmatic compromise
For anyone born in 1960 or later, FRA is 67, the age at which you’re eligible to receive 100% of your Primary Insurance Amount (PIA). If you were to file your claim at age 70, you would increase your benefits by 24% over your PIA. However, claiming at 65 means filing for benefits two years early and accepting a 13.3% reduction in monthly benefits compared to what you’d receive at FRA.
Let’s say your expected PIA is $2,000. Here’s how claiming at different ages would impact that amount:
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Claiming Age
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Percent of Full Benefit
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Monthly Benefit (based on hypothetical PIA of $2,000)
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62
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70%
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$1,400
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65
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86.7%
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$1,733
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67
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100%
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$2,000
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70
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124%
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$2,480
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Data Source: Author’s calculations
For some, claiming benefits at 65 is a pragmatic compromise. You won’t receive as large a benefit as you would if you waited until age 67 or 70, but you’d still bring in more than you would if you made your claim at age 62.
If you’re not counting on Social Security to fund retirement, or you have other sources to draw from outside of Social Security, when you claim becomes purely a matter of preference — and that’s a nice position to be in.
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