Boost Your Social Security Benefits: Earn More at 67 Than at 62!

Social Security plays a pivotal role for countless seniors, with a survey by the Transamerica Center for Retirement Studies in 2024 revealing that 43% of baby boomers view it as their main retirement income source.

The typical monthly payout for retired workers spans all age groups and averages about $1,925, as per the latest figures from the Social Security Administration. This amount, however, differs significantly depending on the age at which individuals start their benefits. Let’s explore the potential increase in monthly benefits if you start claiming at 67 instead of 62.

How Your Claiming Age Influences Your Social Security Benefits

The age you decide to claim Social Security benefits can majorly impact the amount you receive—this could mean a difference of several hundred dollars each month.

Your full retirement age (FRA) is when you are eligible to receive 100% of your earned benefits, based on your employment history. For anyone born in 1960 or later, this age is 67. For those born earlier, the FRA is either 66 or 66 plus a few months.

Claiming benefits before reaching your FRA results in permanently reduced payments. For instance, if your FRA is 67 and you claim as early as 62, your benefits will be reduced by 30%.

At age 67, the average retiree receives approximately $586 more each month compared to starting at age 62. Specifically, the average monthly benefit at age 62 stands at $1,298, while at age 67, it jumps to roughly $1,884, according to 2023 data from the Social Security Administration.

Moreover, postponing your claim beyond your FRA can further increase your benefits. For those whose FRA is 67, waiting until age 70 to start claiming results in a 24% increase on top of the full payment, bringing the average monthly benefit to about $2,038.

When Waiting to Claim Social Security May Not Be Beneficial

Generally, delaying your Social Security claim can financially benefit you in the long run.

A 2019 study by United Income noted that about 57% of Social Security beneficiaries would accumulate more lifetime earnings by waiting until age 70 to claim. Additionally, the average retired household could increase their total earned income by approximately $111,000 by claiming at the optimal time.

However, financial considerations aren’t everything when planning for retirement. If you are dealing with health issues or have reasons to believe your life expectancy might not extend far into your 70s or beyond, choosing to claim earlier could be a wise decision. Although this approach reduces your monthly income, it could result in receiving more cumulative Social Security benefits if your lifespan is shorter than average.

Early filing might also be part of a coordinated strategy with your spouse. For instance, if you are 62 and your spouse is slightly older, you might both decide to retire and claim Social Security simultaneously. By doing so, your spouse can benefit from higher payments by delaying their claim, which can help balance out the reduction in your benefits due to early filing.

There are numerous factors to weigh when deciding at what age to claim Social Security. While the financial implications are significant, it’s equally important to consider your broader retirement objectives and priorities.

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