Deciding when it’s the right time to start your Social Security must be one of the most important financial choices you can make in retirement.

Social Security is not just eligibility- it’s more so about strategy. Claiming it at the wrong time could easily imply leaving thousands of dollars on the table over your lifetime.

Understanding the impact of different claim ages could aid retirees in making smarter decisions. That’s why we have a clear set of age-related instructions on when the best time to claim your Social Security is.

It’s worth mentioning that these aren’t necessarily “wrong” for everyone, but they can be the worst for most retirees, especially those who are hoping to maximize their benefits over the long run.

Age 62: the earliest you can claim, but also the most costly

Age 62 is by far the earliest age at which most Americans can start tapping into their Social Security retirement benefits.

This makes it quite a popular age to claim, since millions of people choose it every single year. However, popularity doesn’t mean it’s the best decision out there.

The thing is, when you claim at 62, your monthly benefit is reduced. If your full retirement age is 67, you might get roughly 70% of your full benefit if you start at 62.

This would mean a 30% cut FOR LIFE, which is quite a lot, if you ask me.

For someone who lives well into their 80s and 90s, this kind of reduction could amount to tens of thousands of dollars in lost income.

The only scenarios where claiming it at 62 makes financial sense are if you have serious health issues, a shorter life expectancy, or urgent financial needs.

Ages 63 to 66: still too soon, with fewer benefits

Some people might come to the conclusion that claiming their Social Security at 62 could lead to a big reduction and just decide to wait a bit longer, but not quite until full retirement age.

They could file at 63, 64, or 65, telling themselves it’s a decent compromise. Unfortunately, it could result in smaller monthly payments.

For each and every year before your full retirement age that you decide to claim benefits, your monthly amount is automatically reduced by 7 percent.

So even when you’re 65, you will still be looking at a cut of around 13% to 20% compared to what you would get if you waited.

But what makes this age range especially tricky is that the losses can feel much smaller than at 62, but they still add up over time. You might still give up thousands of dollars every year, with no real long-term advantage.

Ages 68 and 69: A missed opportunity for maximum benefits

As soon as you reach your full retirement age, claiming will no longer result in any penalty. As a matter of fact, the longer you wait, the more you get to earn.

For every single year after FRA that you decide to delay claiming, your Social Security benefit increases by 8 percent.

If your FRA is 67 and you wait until age 70 to start collecting, your monthly check will turn 24% higher than if you claimed it at 67.

That’s exactly why ages 68 and 69, even if better than claiming early, are still not the ideal choice. If you are already this close to reaching 70, it’s usually worth it to just wait a bit longer and lock in the full increase.

Unless you have other pressing reasons to tap into your benefits at 68 or 69, like a serious health issue, it generally pays to wait and maximize your monthly income.

Age 70 and beyond: no more growth worth waiting for

The age of 70 is pretty much the maximum age at which you can delay Social Security just for retirement purposes.

As soon as you hit that milestone, there’s really no additional financial reward if you decide to wait.

From this point forward, your benefit won’t grow anymore based on delayed retirement credits. In fact, delaying past the age of 70 would imply that you don’t want the money.

By doing so, you might miss out on income you’ve already earned. While there might be a rare tax-related or strategic reason to wait (for instance, you’re living well off of your high salary), for the vast majority of people, there aren’t any advantages.

If you succeeded in waiting this long, congratulations, you managed to maximize your monthly benefit. But as soon as you reach 70, it’s time to start collecting.

Why these ages might turn out to be problematic

The reasons why these four age ranges we just enlisted are seen as the worst times to claim benefits are roughly related to how the Social Security system was designed.

Right off the bat, it’s worth saying that it rewards people who decide to delay and penalizes those who need the money earlier.

While that might seem unfair, the system has been set on actuarial estimates: those who claim early are also expected to receive a specific series of benefits over the years, so they get a smaller monthly amount, but those who wait are also expected to receive benefits over fewer years, so they get a larger “chunk.”

The catch here is that if you live longer than expected, delaying is definitely worth it. That’s also why it is so important to weigh really well your health, financial situation, and family longevity when you make this kind of decision.

When is the best time to claim?

All in all, there’s no one-size-fits-all answer, but there are some general guidelines. For example, if you are in poor health or need money right away, claiming it at 62 or even sooner might be necessary.

But if you are in good health and can afford waiting a bit longer, delaying it until your full retirement age, or even until 70 years old, is often the best route to choose.

All in all, the longer you delay, the larger your monthly checks will be. If you live well into your 80s and 90s, those higher payments can definitely provide more financial security.

Real-world example

For instance, let’s assume you are eligible for $2,000 per month at your full retirement age of 67. If you decide to claim it at 62, you could only get $1,400 per month.

If you wait until 70, you could get only $2,480 per month. That’s well over the $1,000 difference between the earliest and latest claiming age.

In fact, the experiment lasted over the course of 20 years, and the gap turned out to be well over $150,000 in total benefits.

This example truly shows how powerful the claiming age you decide upon can be, and how costly the wrong one turns out to be.

Other factors worth considering

Before you choose when’s the best time to file, you should consider the following:

• your health – if you are in poor health or have a shorter life expectancy, early claiming might make a lot of sense;
• your spouse’s situation – if you are married, your benefit amount can greatly impact your spouse’s survivor benefits;
• your savings – if you have the possibility to rely on other retirement income, waiting to claim it might allow your Social Security to grow;
• Whether you still work or not, earning income while also claiming before your FRA can greatly reduce your benefits.

Understanding all of these factors and how they might interact with your Social Security strategy will also help you make the best decision for your specific situation.

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