When you choose to start taking your Social Security benefits can make a huge difference and how much money you receive, and 96% of Americans are not taking Social Security at the optimum time to get the most benefits, a new study has found.
Typically, American retirees are eligible to begin claiming their Social Security benefits at age 62. However, each year you wait, the amount of money you will receive each year grows – maxing out at age 70. Depending on when you were born, to get the full retirement benefit, your benefit year is either at age 65, 66 or 67.
For those born in 1960 or later, the full retirement age is 67. If you were born in 1937 or earlier, your full retirement age is 65.
What a new study has found is that the average age Americans start claiming their Social Security benefits is 63. Taking your benefits at age 62 or 63 can cut your benefits significantly.
While there is no optimal age that is right for every individual, on average, the study found that most people would be best off by waiting until age 65 to begin claiming their Social Security benefits.
Here is a rough estimate of how much your benefits will be reduced if you start taking Social Security at the following ages:
Here is the percentage your Social Security benefits will increase by if you wait until you are older to start collecting.
There are situations when it is the smart choice to begin taking Social Security benefits at an earlier age or at the first age you are eligible.
It’s important to consider that even though you will have a reduced monthly income, depending on how long you live, you may actually receive more money in the long run. This is simply because you will be receiving money for a longer duration of time.
The most important thing to consider is whether or not you can still afford to live on a lower Social Security benefit. This may be the case when you are not relying solely on Social Security benefits for your monthly income.
If you have health issues that make it difficult or impossible to continue working, it might make sense to retire and start claiming benefits earlier. This may also be the case if you have a spouse that needs home care and you are spending money for nursing help while you are at work. It could make more sense for you to retire early so you can stay home and provide that care yourself and save the expense.
If you expect to live a long time and are in reasonably good health, you may break even or collect more money over the long haul by claiming your benefits at the first age you are eligible.