Is It Better to Take Social Security at 62 or 67? The Answer Is Simpler Than You Might Think.
When it comes to choosing what age to begin taking Social Security, you have plenty of options. You can file as early as age 62, or you can wait a few years and earn larger checks. Delay claiming until age 70, and you can maximize your monthly payments.
Two of the most popular ages to claim, though, are 62 and 67. Age 67 is the full retirement age for everyone born in 1960 or later, meaning it’s the age at which you’ll receive 100% of your benefit based on your work history.
But what’s the best age to begin taking benefits? While there’s no one-size-fits-all answer, there’s a simple question you can ask yourself to decide: What’s your biggest priority in retirement?
If your main goal is to retire early
Early retirement is a dream that many share, but it can be tough to achieve. Spending even a few more years in retirement could require tens of thousands of dollars more in savings — or even more if you live a longer-than-average lifespan.
Claiming benefits at age 62 will result in smaller monthly payments, but it can also make earlier retirement more manageable.
It is possible to retire in your early 60s and delay benefits. However, you’ll need to rely entirely on your savings and other sources of income in the meantime, and that risks depleting your retirement fund too quickly. When you take benefits at 62, it’s easier to retire early without dipping as much into your savings.
The added bonus of relying less on your savings is that it can help your money grow more over time. Your savings won’t stop building just because you’re no longer working, and the more you have in your account, the more your money will grow. By depending more on Social Security early in retirement, you can make the most of every dollar in your retirement account.
If you’re looking to maximize your income
One of the simplest, most effective ways to dramatically boost your retirement income is to delay claiming Social Security. Filing early will result in smaller checks, while delaying could boost your payments by hundreds of dollars per month.
In fact, according to 2023 data from the Social Security Administration, the average retiree collects around $1,884 per month in benefits at age 67 compared to $1,298 monthly at 62 — a difference of roughly $586 per month.
If you know your savings likely won’t last through retirement, maximizing your monthly payments can be a smart move. While relying solely on Social Security isn’t ideal, if it becomes your only source of income, larger checks can go a long way.
Delaying benefits can also be a good idea if you plan to continue working part-time in retirement. If you’re under your full retirement age and taking Social Security, your benefits could be temporarily reduced, depending on how much you’re earning from your job. While your benefit will be recalculated at your full retirement age, you may choose to simply delay benefits until age 67 to avoid those reductions in the first place.
Determining when to take Social Security is an incredibly important decision that will have a lifetime impact on your monthly payments. While there’s no single best age for everyone to file, considering your goals and priorities can make it easier to decide when to begin claiming.
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Is It Better to Take Social Security at 62 or 67? The Answer Is Simpler Than You Might Think. was originally published by The Motley Fool
