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The No. 1 Reason to Claim Social Security at Age 62

The Motley Fool
The Motley Fool
 2022-01-20

You can start collecting your Social Security benefits as early as age 62 and as late as age 70 -- though you have a full retirement age (FRA) somewhere in between, which is 66 or 67 for most of us. Start collecting before your FRA, and your benefit checks will shrink. Delay beyond it, and they'll grow bigger.

That can make it seem like delaying is a no-brainer move, but remember that when you start early, you'll collect many more checks than if you delay. The most popular age for starting to collect Social Security benefits is actually 62, according to a 2019 report from the Center for Retirement Research at Boston College.

Here's a look at the main reason why starting at 62 makes plenty of sense for lots of people -- plus why waiting until age 70 is the right move for some.

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Timing matters

It's good to have a solid understanding of just how much less (or more) you'll receive from Social Security if you start collecting your benefits early (or late). This table show what percentage of your full retirement benefits you'll get, depending on when you start collecting them, based on your FRA .

Start Collecting at

Full Retirement Age of 66

Full Retirement Age of 67

62

75%

70%

63

80%

75%

64

86.7%

80%

65

93.3%

86.7%

66

100%

93.3%

67

108%

100%

68

116%

108%

69

124%

116%

70

132%

124%

Source: Social Security Administration.

You simply may have to start collecting benefits at 62

While this table may have you mulling over which age is best for you to start collecting your benefits, you may actually end up with little choice in the matter. According to the 2019 Retirement Confidence Survey, for example, 43% of respondents reported retiring earlier than they expected, versus only 9% who retired later than expected. The reasons given for retiring early included health problems (cited by 35%) and changes at their company (35%) -- which often refer to downsizings.

Those who end up retiring early don't necessarily have to start collecting Social Security benefits. In fact, for lots of people, it can be a good strategy to start drawing more from IRAs or other retirement accounts for a few years in order to delay starting to collect Social Security and thereby increasing the size of your eventual benefit checks. This isn't best or even possible for many people, though. Those who simply don't have enough to live on without Social Security should just start collecting their benefits as soon as they can.

There are many in that last group of people: According to the Social Security Administration (SSA), Social Security benefits, on average, make up about 30% of elderly Americans' income. Among elderly beneficiaries, about 37% of men and 42% of women get 50% or more of their income from Social Security, while more than 10% get 90% or more of their income from it.

Starting to receive benefits at 62 isn't so bad

Don't feel bad if it looks like you'll be turning on the Social Security faucet early instead of waiting until age 70 for those much fatter checks. Remember that you'll get many more checks by starting early. For example, if you start at age 62 and live to age 85, that's 23 years, meaning 276 months of checks. Someone who starts at age 70 and lives to 85 is looking at 15 years and 180 months of checks.

Indeed, for those who live an average-length life, the total benefits received will be roughly the same, no matter when they start collecting. That's how the Social Security program is designed.

Starting early also makes sense if your family tends to not live long life spans or if you're in poor health and stand a decent chance of living a shorter-than-average life.

The case for delaying up to age 70

On the other hand, if you can put off starting to collect those benefits and you have a decent chance of living a longer-than-average life, it's worth delaying as long as you can, up to age 70. After that, there are no more increases to benefits, so 70 should be the latest age at which you apply for your benefits.

The more you know about Social Security , the smarter decisions you can make about it, which can make a big difference to your financial security in retirement.

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