When should you claim social security?
This is one of the hardest questions to answer when you think of retirement. You can already start with 62 benefits or wait as long as 70. And there are pros and cons to claiming ASAP or waiting as long as possible.
To help you decide which age is best for you, three Motley Fool retirement experts weigh the best reasons to claim social security at three popular ages: 62, 67 and 70.
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Age 62
Maurie Backman: Age 62 is the earliest age you can submit to Social Security, and if you follow this path, you will significantly reduce your benefits by signing up to receive it before full retirement age. But despite the reduction, 62 is still a good age to claim benefits.
To submit one thing, you can be submitted to your Social Security at 62. Many people work hard all their lives and zealously save for the future. If you are one of them and can afford your senior living expenses based on the money you sent away in your 401 (k) or IRA alone, then claiming benefits at 62 can leave you faster. And from there, you will be more likely to reach your retirement goals.
Let’s be honest: the older we get, the more health issues or mobility we may experience. As such, it is reasonable to assume that you will have more energy to travel at 62, enjoy the nightlife, or pursue hobbies than at a later age. Claiming benefits as early as possible is therefore an opportunity worth taking advantage of if you have saved enough to make your monthly payments successful.
Another thing you need to know is that if you have doubts about your health, it could submit more money into your social security early on. It is true that you will have less money each month if you claim benefits at 62, but if you died at a relatively young age, you can lifespan base.
Of course, if you have not yet saved much for retirement and have no reason to think that you will not lead a long life, you may want to choose a later age to reap benefits. But if you have earned the right to start your retirement earlier or have questions about your long-term health, 62 may be the ideal age to start reaping the social security benefits.
Age 67
Katie Brockman: Claiming benefits at age 67 is a good option on the middle ground if you are unsure whether to claim social security early on, or to delay benefits.
Age 67 is the full retirement age (FRA) for anyone born in 1960 or later. By claiming from your FRA, you receive the full benefit amount to which you are entitled to claim. In other words, although you will not receive the bonus amount you earn by delaying benefits, your monthly payments will not be reduced either.
To see how much you are entitled to claim benefits, you can check your statements online with a mySocialSecurity account. Your statements include an estimate of your benefit amount based on your actual earnings during your career. Remember that this number assumes that you will claim from your FRA, so if you claim before or after the age, you must take into account adjustments in your benefit amount.
Claiming benefits at age 67 can be a smart move for someone who wants to earn more from social security but does not want to work for too long. Although you do not necessarily have to claim and retire benefits at the same time, many people continue to work until they are ready to claim social security.
Waiting up to 70 years to retire and claim benefits may not be feasible for many workers, especially if you are facing health issues or want to start your retirement. However, if you claim at 62, it means that you will receive significantly smaller checks each month, which can be problematic if you retire money. Age 67 is a smart compromise for many retirees, as your benefits will not be diminished, but you can still retire relatively early.
Age 70
Christy Bieber: Not everyone can wait up to 70 to claim social security benefits. But if you can make the plan work, it is often the best choice to wait until 70. This is true both because you will have more money each month when you will eventually claim benefits, and because you will maximize the chances of achieving the best lifelong benefits.
Look, you can earn delayed retirement credits for each month you wait to start receiving benefits after full retirement age, but after age 70 you can no longer earn credits, so there is no benefit to delaying further. not.
These delayed retirement credits increase the amount of your Social Security income annually by 8% for each full year you wait, and this can result in hundreds or even thousands of dollars more in annual income. This extra money can come in handy later in life if your savings start to run short.
And while you may have to collect your higher benefits for a while before you can make up for lost money by delaying, many people break even and live long enough to come off better. In fact, research has shown that claiming benefits at 70 is the financially optimal choice for almost 60% of pensioners.
Of course, claiming 62 or 67 may ultimately be the better option if you die before you pay compensation, although you can also reduce the benefits of your surviving widow (s) by claiming early. But unless you have reason to suspect that you will not live as long as your life expectancy, chances are good that the delay to 70 will ultimately be the best decision for you.