When should you file for Social Security? The right answer can be difficult to determine.
As we have pointed out, in some cases, claiming early makes sense. In other situations, it pays to wait.
The largest percentage of Americans have a clear age in mind, though: They start receiving benefits at age 62 — which for most people is the earliest opportunity — according to recent analysis by the Transamerica Center for Retirement Studies.
In fact, the study found that the most popular ages for beginning benefits are:
- Age 62: 31% of recipients
- Age 65: 20%
- Ages 66-69: 15%
Taking benefits earlier — rather than waiting — makes sense in some circumstances, such as if you absolutely need the money or have health problems that suggest you may not live a long life.
However, claiming benefits early will cost you: Claiming before you reach your full retirement age means your monthly benefit payment will be smaller — for life.
On the other hand, there can be real advantages to waiting to claim your benefits. In fact, each year you delay claiming between your full retirement age and the age of 70 increases your monthly benefit by an additional 8%, according to the Social Security Administration.
Despite that fact, just 4% of recipients wait until age 70 or later to begin taking Social Security benefits, Transamerica says. For the record, your monthly benefits stop increasing after age 70, so waiting longer than that does not make sense.
Unfortunately, there is no simple answer about the best time to file for Social Security benefits. Your own life circumstances will dictate the right decision for you.
The best way to make the right decision is to educate yourself about your options. To get started, check out:
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