One decision can shape your retirement income for the rest of your life. That is the decision of when to claim Social Security.
Rick Reed, vice president and defined contribution practice director at Segal, a benefits and HR consulting firm, put it plainly: “Deciding when to claim Social Security is one of the most important retirement decisions Americans face. And it’s irreversible. There’s no single right age for everyone.”
So what does each claiming age actually mean for your monthly check? Here is a straightforward look at the three ages most retirees consider.
Claiming at 62: You Can, But It Costs You
Age 62 is the earliest you can start collecting Social Security retirement benefits. For many people, that monthly check is a welcome relief. But claiming this early comes with a permanent price tag.
According to Reed, starting at 62 can permanently reduce your monthly benefit by up to 30 percent. That reduction does not go away. It stays with you for life.
That said, claiming early is not always the wrong move. Reed noted that the right time to claim depends on your life expectancy, your available savings, and your overall retirement goals.
Claiming at 65: Less Than You Might Expect
Many people assume that 65 is the magic number for full Social Security benefits. That used to be true. But the rules changed. For anyone born in 1960 or later, full retirement age is now 67, not 65.
Melanie Musson, a finance expert with Quote.com, explained what that means in dollars. “Your retirement benefit at 67 is considered 100%,” she wrote. “So, if you claim benefits at 65 years old, you will receive 13.3% less than you would have at the full retirement age of 67.”
Claiming at 65 still gets you a check. It just will not be your full check.
Claiming at 70: The Largest Monthly Benefit
Waiting until 70 means the biggest monthly check Social Security will ever send you. Benefits grow by about 8 percent for every year you delay past full retirement age, according to Reed.
The difference in real dollars is striking. Yehuda Tropper, CEO of Beca Life Settlements, laid it out clearly: “If you claim at 62, the maximum monthly benefit is $2,969. Delaying until 70 bumps that maximum to $5,181.”
That is a difference of more than $2,200 every single month.
Of course, waiting until 70 is not the right answer for everyone. Tropper noted that it makes the most sense if you are in good health and can either keep working or use other savings to cover your expenses in the meantime. For those dealing with serious health issues or financial pressures, waiting may not be practical.
The Bottom Line
There is no one-size-fits-all answer here. Your health, your savings, and your plans all factor in. But one thing is clear: the age you choose has a real and lasting impact on your retirement income.
It is worth doing the math before you decide. Because once you claim, there is no going back.