Choosing between claiming Social Security at 62 or waiting until 70 can create a wide gap in your monthly income. Starting early gives you more years of payments, while delaying may increase the amount of each check. The tradeoff comes down to how long you expect to collect benefits and how much income you need along the way. Comparing the break-even point can help show when waiting may produce more cumulative benefits.
A financial advisor can help you plan for retirement at any age.
How Claiming Age Changes Your Social Security Benefit
The size of your monthly retirement check largely depends on the age at which you start collecting. Your earnings history establishes the foundation for your payment, but when you claim affects the portion you receive each month.
Claiming at 62 Means a Smaller Monthly Benefit
Age 62 is generally the earliest you can begin collecting Social Security retirement benefits. Claiming that early comes with a permanent reduction in your monthly payment. Social Security calculates the reduction based on how many months before your full retirement age (FRA) you begin receiving benefits.
For people born in 1960 or later, FRA is 67. In that case, claiming at 62 means starting benefits 60 months early. This generally reduces a worker's retirement benefit by 30% compared with the amount available at FRA. For example, someone entitled to $2,000 per month at FRA would receive approximately $1,400 at 62, before considering other adjustments.1
Waiting Until Full Retirement Age
Waiting until FRA allows you to receive 100% of the retirement benefit calculated from your earnings record. The Social Security Administration (SSA) sometimes refers to this as your primary insurance amount. FRA varies by birth year, so it is not 67 for everyone. It gradually increases from 66 for people born from 1943-1954 to 67 for those born after 1959.2
Your earnings history also matters independently of your claiming age. Social Security generally calculates retirement benefits using your highest 35 years of earnings. Continuing to work may increase your eventual benefit if new higher-earning years replace lower-earning years in the calculation.
Delaying Benefits Can Increase Your Check
If you wait beyond FRA, delayed retirement credits can increase your monthly retirement benefit. For people born in 1943 or later, these credits generally increase benefits by 8% per year, or two-thirds of 1% for each month benefits are delayed beyond FRA.
For someone with an FRA of 67, waiting until 70 generally produces a retirement benefit equal to 124% of the FRA amount. A $2,000 FRA benefit, for example, would increase to approximately $2,480 per month at 70, before future cost-of-living adjustments.3
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