Statistically, this is the worst age to claim Social Security.
For many Americans, Social Security is more than just a monthly check. It helps you live a comfortable life. That’s why it’s so important for people planning to claim Social Security in the near future to maximize their benefit amount. One of the biggest decisions that can help beneficiaries maximize their benefits is when to claim Social Security. Depending on your circumstances, you may be able to claim benefits after age 62. However, statistically certain ages are considered unfavorable for claiming benefits. In this article, we’ll look at the most difficult ages to claim Social Security.
Why does age matter?
The general rule when it comes to Social Security is that the longer you wait to claim, the larger your monthly benefit check will be. You can claim your benefits as early as age 62, but you can wait until your full retirement age (FRA) to receive the full amount.
Your date of birth determines your full retirement age. FRA is the age at which you can receive 100% retired worker benefits. FRA has increased from 65 to 67 over the past 40 years. FRA is 67 for those born after 1960.
In addition to FRA, your claiming age also plays a role in determining the size of your benefit check. If you claim benefits before your full retirement age, your monthly check will be permanently reduced. On the other hand, claiming benefits after FRA increases your benefits for the rest of your life beyond what you would have received if you claimed at FRA.
If you wait until age 70 to claim benefits, you can increase your monthly benefit checks even further. Typically, for each year you delay claiming benefits, your benefits increase by up to 8% until age 70. So, with a few exceptions, waiting until age 70 is the best age to claim Social Security benefits.
Researchers at United Income, an online investment planning company, analyzed retirees’ claiming age and how it affects their lifetime earnings, talking about the most difficult age to claim Social Security in 2019. Researchers used this data to determine whether retirees filed at the optimal age to maximize Social Security over their lifetime.
At least statistically, their findings help determine the best and worst ages to claim Social Security, and the findings show that early filers are at a disadvantage when it comes to Social Security amounts. Researchers studied the claims decisions of nearly 20,000 retired workers using data from the University of Michigan’s Health and Retirement Study.
Researchers at United Income found that age 64 is the worst age to claim Social Security. This is because this is the age at which the optimal claim rate is lowest. Three additional ages (62, 63, and 65) decreased the odds of success.
So these four age groups are all statistically the worst ages to claim Social Security. It is important to note that these ages are all before the current full retirement age, so claimants may be subject to early filer penalties.
In addition to lower monthly benefits, early filers may also be subject to a retirement income test. This test tells the Social Security Administration (SSA) whether it should withhold some or all of a worker’s Social Security benefits, depending on how much money they earn.
Claiming early isn’t always a bad thing.
Although the United Income survey points out that early filers are at a disadvantage, sometimes filing early can be a smart move. For example, people with solid retirement funds and who don’t necessarily need Social Security benefits can claim their benefits early if they want to retire a few years sooner.
Sometimes you may have no other choice than to claim Social Security early. If you have lost your job or are unable to work due to health problems, applying for Social Security can help you solve your financial problems.
If you have good reason to believe you may not live well into your 80s or beyond, you can save more of your Social Security by claiming benefits early. Although your monthly payments may be lower, you may receive more over your lifetime than if you defer your benefits.
If you and your spouse are eligible to claim Social Security, claiming benefits early may also be a smart choice. In that case, one of you could claim benefits early to have extra cash early in retirement, while the other could wait until age 70 to claim benefits.
Even if you plan to retire early, if you have sufficient savings or other sources of income, you may be able to delay claiming benefits to maximize your benefits. However, if you do this, you run the risk of depleting your savings too quickly.
final words
So statistics show that 62, 63, 64, and 65 are the worst ages to claim Social Security, while 70 is the best age. However, it is not possible for every retiree to wait until FRA or age 70 to claim benefits. That’s because a retiree’s health, marital status, and financial needs play a decisive role when choosing when to claim benefits.
Therefore, when determining the best age to claim Social Security, you’ll want to consider your personal and financial situation, as well as your retirement priorities, to make the most of your Social Security benefits.
