Getting the recipe right for a secure and fulfilling retirement can be challenging. You’ll need to gather all the essential ingredients like personal savings and investments (and maybe even a dash of a comfortable pension). However, there’s another element that can have a huge impact on your retirement plan: your age when claiming Social Security. 

By mastering the “age” ingredient in your Social Security recipe, you can create a personalized plan that delivers the maximum benefit for your desired lifestyle, even if that means adjusting other ingredients like savings and investment strategies. 

We gathered all the information you need to know from the official Social Security website and distilled it here into an easy-to-follow recipe. Below, we’ll focus on how your age impacts your Social Security benefits. We’ve also written tons of other Social Security articles, which you can view in our Social Security hub.

The “Age” Ingredient: Understanding the Impact

Unlike a traditional recipe with fixed ingredients, Social Security benefits are calculated based on a formula. This formula uses both your lifetime earnings and the age at which you start claiming benefits. Your age may only count for half of this recipe, but it can be a big portion. 

A key concept to understand is Full Retirement Age. This age is based on your birth year. You can check your full retirement age on the Social Security website. You can receive your full monthly benefits when you reach your full retirement age. Retiring earlier or later can impact your benefits, too. 

You can claim benefits as early as 62 or delay claiming until 70 (or beyond). While the idea of retiring early may be appealing, there are some tradeoffs. 

Here’s a breakdown of how full retirement age and retirement timing affects payouts:

• Early Retirement (Age 62 to Full Retirement Age): If you choose to, you can begin receiving full retirement benefits before you reach full retirement age. However, doing so will permanently reduce your retirement age. For each month you claim benefits before your full retirement age, your benefit will be reduced by a small percentage. These percentages add up quickly, though, totaling a maximum of 30%. The maximum benefit at 62 is $2,710.
• Full Retirement Age: Reaching your full retirement age allows you to unlock the maximum benefit you’re entitled to based on your lifetime earnings. It’s the “default,” simply put. This is the sweet spot that most people should aim for. The maximum benefit at full retirement age is $3,822.
• Delayed Retirement: Your monthly benefit will increase if you delay retirement past your full retirement age. These extra benefits max out at 70, so there is no point in waiting beyond 70. However, waiting until 70 isn’t necessarily the best choice for everyone. The maximum benefit at 70 is $4,873.

That said, the maximum you can receive is based on how much you made throughout your career. The age at which you retire can lower or increase this default amount. It’s important to be informed to make the best decision. We recommend learning how Social Security works before deciding on when to retire. 

Personalizing Your Retirement Recipe

The decision of when to retire should be considered in terms of your whole retirement recipe. It’s one of the foundation pieces you use to build a secure retirement, but it isn’t the only one. All your retirement ingredients must work together.

Here are other aspects you should consider before deciding when to collect Social Security:

• Personal Savings and Investments: Having a nest egg accumulated through personal savings can be a powerful buffer and make Social Security less important. When you claim Social Security may not matter so much if you have plenty of other money saved. 
• Employer-sponsored Retirement Plans: Many employers offer retirement plans like 401(k)s. Whenever possible, take advantage of these plans to flesh out your retirement. Often, these plans are pre-tax, allowing you to lower your taxable income while growing your retirement savings. (However, remember that you’ll have to pay tax when you collect from your account later.)
• Expected Retirement Lifestyle: Consider what you plan to do during your retirement. Will you travel extensively or spend most of your time at home? Is your home paid off? Do you plan to downsize? Have realistic expectations to get ahead of your expected expenses. No one wants to be surprised when they’re on a fixed income. 

The beauty of this recipe lies in its personalization. There is no age when retirement is right for everyone. It depends largely on how all of the above ingredients are working together.

Many people may try to maximize their benefits by waiting until they’re 70 when their maximum monthly payment is available. However, this can have its own downsides, such as having a shorter retirement. 

If you don’t have other savings, you may have to wait several months to increase your Social Security check. If you plan to travel extensively, this may also be the case. It’s important to balance your retirement, with Social Security only being one ingredient. 

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