Deciding when to file for Social Security benefits can be daunting. Some choose to file early, while others believe it is a better bet to wait.
However, a recent analysis says the choice is relatively easy: More than 90% of older workers should file for benefits at age 70, according to the analysis from the National Bureau of Economic Research.
Using 2018 and 2019 consumer data from the U.S. Census Bureau and the Federal Reserve as a springboard for its analysis, the study authors say the following:
“We find that virtually all American workers age 45 to 62 should wait beyond age 65 to collect. More than 90 percent should wait till age 70.”
Despite this fact, just 10.2% of retirees wait until age 70 before taking their benefits, the authors say.
Those who don’t wait until 70 to take their benefits lose a median of $182,370 in household lifetime discretionary spending (in 2022 dollars). In plain English, that means that if they instead waited until age 70 to file for Social Security, their lifetime spending would jump by 10.4%.
The authors stress that the optimal time to file for Social Security depends on household characteristics, and some people would indeed be better off filing early. But in general, most would do better to wait.
When should you file for Social Security?
As the study authors note, a large percentage of people can benefit from waiting to file for Social Security. It’s a strategy we previously highlighted in “7 Reasons Not to Take Social Security at Age 62.”
However, some folks likely are better off taking Social Security early. For example, we have noted in other reports that it can make sense to start getting benefits early if either you or your spouse are in poor health and expect to have a short life expectancy.
For more, check out “5 Times When It’s Smart to Claim Social Security Early.”