The decision of when to begin claiming Social Security benefits plays a crucial role in retirement planning. The earliest you can make a claim is at age 62, but the amount will increase incrementally if you delay up until age 70. Claiming early offers immediate income but risks reducing your benefits, whereas waiting could increase your monthly benefits but might necessitate another income source in the meantime. Your unique circumstance and retirement goals should guide this decision.
With changes in Social Security legislation, the average claiming age has steadily increased. The Social Security Act of 1983, for instance, gradually elevated the full retirement age from 65 to 67, meaning people are retiring later in life. Comprehending these legislative shifts is key to future-proofing your retirement years.
The law’s first phase, which took effect in the early 2000s, pushed the retirement age up to 66 for those born in 1937 or later. The second phase currently in progress sets the full retirement age at 67 for individuals born in 1955 onwards. Full implementation is expected by 2027.
2014 data shows that the average age for starting benefits had risen by about a year since 2004, to 64 years and four months.
Strategizing your social security benefits: understanding the timing
The latest data suggests the current norm is 65, which points to a trend of delayed benefit claiming, influenced by factors such as increased life expectancy, retirement rule changes, or general improvements in senior health.
In 2022, the average retirement benefit for new claimants was $1,938.75. Claimants who began at 65 fetched a slightly lower monthly average of $1,874.56, while those who waited until 70 received a monthly average of $2,370.50. The maximum benefit for the year at full retirement age was $3,345, though this figure was reached by a small percentage of claimants. Most retirees received between $800 and $1,800 monthly, with the median being approximately $1,500.
Many start claiming Social Security benefits at 65, the traditional retirement age, and when Medicare eligibility begins. However, the best approach depends largely on personal circumstances. For example, if you plan to work beyond 65 or possess pre-existing income, delaying benefits could be beneficial. But, if you are in poor health or lacking other income sources, claiming early might be more advisable. Every situation is unique; therefore, take time to evaluate your whole retirement plan, health, anticipated lifespan, and financial needs before deciding when to start your Social Security benefits.
