When Should You Claim Social Security – Age 62, 67 or 70?

Social Security 62 vs 67 vs 70 is a critical decision that can significantly impact your retirement income and financial security. The age at which you choose to claim your Social Security benefits can make a substantial difference in the amount you receive each month and over your lifetime. In this comprehensive guide, we’ll explore the pros and cons of claiming at age 62, full retirement age (67 for those born in 1960 or later), and age 70, helping you make an informed decision that aligns with your unique circumstances.

The Basics: Understanding Social Security Benefits

Before diving into the specifics of when to claim, let’s review the fundamentals of Social Security benefits. Social Security is a federal program that provides retirement income to eligible workers and their families. Your benefits are calculated based on your lifetime earnings and the age at which you claim them.

The full retirement age (FRA) is the age at which you can receive your full Social Security benefits without any reductions. For those born in 1960 or later, the FRA is 67. However, you can choose to claim your benefits as early as age 62 or as late as age 70.

Claiming at Age 62: The Earliest Eligibility

If you claim Social Security at age 62, you’ll receive reduced benefits compared to your full retirement age amount. The reduction is permanent, and the earlier you claim, the greater the reduction.

For those born in 1960 or later with an FRA of 67, claiming at age 62 results in a 30% reduction in benefits. This means that if your full retirement benefit is $1,000 per month, you would receive $700 per month if you claim at age 62.

Pros of Claiming at Age 62

• Early access to benefits: You can start receiving Social Security income as soon as you’re eligible, which can be helpful if you need the money or want to retire early.
• Longer benefit period: By claiming early, you’ll receive benefits for a longer period, although the monthly amount will be lower.
• Flexibility: If you have other sources of retirement income, claiming early can provide additional financial flexibility.

Cons of Claiming at Age 62

• Permanently reduced benefits: The reduction in benefits is permanent, meaning you’ll receive a lower monthly payment for the rest of your life.
• Potential for higher taxes: If you continue working while receiving Social Security benefits before your FRA, a portion of your benefits may be subject to federal income tax.
• Missed opportunity for higher benefits: By claiming early, you forfeit the chance to receive higher monthly payments if you wait until your FRA or age 70.

Claiming at Full Retirement Age (67 for Those Born in 1960 or Later)

If you wait until your full retirement age (FRA) to claim Social Security, you’ll receive your full, unreduced benefits. For those born in 1960 or later, the FRA is 67.

Pros of Claiming at FRA

• Full benefits: You’ll receive your full Social Security benefits without any reductions.
• No earnings test: Once you reach your FRA, you can work and earn any amount without having your benefits reduced.
• Potential for higher survivor benefits: If you’re married, your spouse may be eligible for higher survivor benefits based on your full benefit amount.

Cons of Claiming at FRA

• Missed opportunity for delayed retirement credits: By claiming at your FRA, you won’t receive the additional benefits available if you delay claiming until age 70.
• Shorter benefit period: If you have a longer life expectancy, you may receive fewer total benefits over your lifetime compared to delaying until age 70.

Claiming at Age 70: Maximizing Your Benefits

If you delay claiming Social Security until age 70, you’ll receive the maximum possible benefit amount. For each year you delay claiming past your FRA, your benefits increase by a certain percentage, known as delayed retirement credits.

For those born in 1960 or later with an FRA of 67, delaying until age 70 results in a 24% increase in benefits compared to your FRA amount. This means that if your full retirement benefit is $1,000 per month, you would receive $1,240 per month if you claim at age 70.

Pros of Claiming at Age 70

• Higher monthly benefits: By delaying until age 70, you’ll receive the maximum possible benefit amount each month.
• Potential for higher survivor benefits: If you’re married, your spouse may be eligible for higher survivor benefits based on your increased benefit amount.
• Longevity protection: If you have a longer life expectancy, delaying until age 70 can result in higher total lifetime benefits.

Cons of Claiming at Age 70

• Shorter benefit period: By delaying until age 70, you’ll receive benefits for a shorter period compared to claiming earlier.
• Missed opportunity for earlier income: If you need the income sooner or have a shorter life expectancy, delaying until age 70 may not be the best choice.
• Potential for higher taxes: If you continue working while delaying benefits, a portion of your benefits may be subject to federal income tax.

Social Security 62 vs 67 vs 70 Calculator

To help you understand the financial impact of claiming at different ages, you can use a Social Security 62 vs 67 vs 70 calculator. These calculators allow you to input your expected benefit amount, birth year, and other relevant information to estimate your monthly benefits and total lifetime benefits based on your claiming age.

Many reputable financial institutions and government websites offer free Social Security calculators. For example, the Social Security Administration’s Retirement Age Calculator (https://www.ssa.gov/benefits/retirement/planner/ageincrease.html) can provide personalized estimates based on your specific circumstances.

Social Security 62 vs 67 vs 70 Taxes

It’s important to consider the potential tax implications of claiming Social Security benefits at different ages. If you claim benefits before your FRA and continue working, a portion of your benefits may be subject to federal income tax.

The amount of your benefits that is taxable depends on your combined income, which includes your adjusted gross income, non-taxable interest, and half of your Social Security benefits. If your combined income exceeds certain thresholds, up to 85% of your benefits may be subject to federal income tax.

Additionally, if you claim benefits before your FRA and continue working, your benefits may be temporarily reduced due to the Social Security earnings test. However, once you reach your FRA, the earnings test no longer applies, and you can work and earn any amount without having your benefits reduced.

Factors to Consider When Deciding When to Claim Social Security

While the age at which you claim Social Security is a personal decision, there are several factors to consider:

1. Life expectancy: If you have a longer life expectancy, delaying benefits until age 70 may result in higher total lifetime benefits. However, if you have a shorter life expectancy, claiming earlier may be more advantageous.
2. Retirement goals: If you plan to retire early, claiming at age 62 may be necessary to supplement your income. If you plan to work longer, delaying benefits until age 70 may be more beneficial.
3. Spouse’s benefits: If you’re married, consider how your claiming age will impact your spouse’s potential survivor benefits.
4. Other sources of income: If you have other sources of retirement income, such as a pension or investments, you may be able to delay claiming Social Security to maximize your benefits.
5. Tax implications: Consider the potential tax implications of claiming at different ages, especially if you plan to continue working.
6. Break-even age: Calculate the break-even age at which the total lifetime benefits from delaying would surpass the benefits of claiming earlier.

It’s essential to carefully evaluate your unique circumstances and consult with a financial advisor or a Social Security representative to make an informed decision that aligns with your retirement goals and financial needs.

Frequently Asked Questions on Various Online Platforms Like Google, Quora, Reddit, and Others

Q: Can I claim Social Security benefits and still work?

A: Yes, you can claim Social Security benefits and continue working. However, if you claim benefits before your full retirement age (FRA) and earn above a certain annual limit ($21,240 in 2023), your benefits may be temporarily reduced due to the Social Security earnings test. Once you reach your FRA, the earnings test no longer applies, and you can work and earn any amount without having your benefits reduced.

Q: What is the maximum Social Security benefit I can receive?

A: The maximum Social Security benefit for someone retiring at age 70 in 2023 is $4,555 per month. However, this amount is subject to change annually based on cost-of-living adjustments (COLAs).

Q: Can I claim Social Security benefits on my spouse’s record?

A: Yes, you may be eligible to claim spousal benefits based on your spouse’s earnings record if their benefit amount is higher than your own. The maximum spousal benefit is 50% of your spouse’s full retirement benefit amount.

Q: What happens to my Social Security benefits if I get divorced?

A: If you were married for at least 10 years and are currently unmarried, you may be eligible to receive benefits based on your ex-spouse’s earnings record. However, this does not affect your ex-spouse’s benefits or their current spouse’s benefits.

Q: Can I claim Social Security benefits if I’ve never worked?

A: If you’ve never worked and paid Social Security taxes, you may still be eligible for spousal or survivor benefits based on your spouse’s or ex-spouse’s earnings record.

Q: How are Social Security benefits taxed?

A: Social Security benefits may be subject to federal income tax, depending on your combined income (adjusted gross income, non-taxable interest, and half of your Social Security benefits). Up to 85% of your benefits may be taxable if your combined income exceeds certain thresholds.

Q: Can I change my mind after claiming Social Security benefits?

A: Yes, you have a limited opportunity to withdraw your Social Security claim and reapply later. This option is available only once, and you must repay all the benefits you’ve received, including any spousal or child benefits.