For many approaching retirement, the question of “when” to claim Social Security benefits looms large. The general advice is to wait until full retirement age (FRA), which depends on the year you were born but is generally around 67. (You can use the SSA’s age calculator to get your full retirement age.)
However, you can technically retire anywhere from 62 to 70, with your monthly benefits increasing the longer you wait.
With this in mind, it can be hard to figure out exactly when to start claiming Social Security.
Claiming Social Security at 67 can be the best choice for achieving financial security and a more fulfilling and engaged retirement experience. Yes, we’d all like to delay as much as possible to maximize our benefits. However, there is a lot more to consider than just your finances!
Some individuals may even benefit from retiring early, even if it means cutting into their monthly check.
Let’s look at why retiring at full retirement age is often the best choice.
Advantages of Claiming Social Security at 67
There are two major benefits to claiming Social Security when you fit full retirement age: achieving financial security and pursuing personal fulfillment.
Financial Security
Claiming Social Security at 67 provides a guaranteed, predictable income stream, which is vital for retirees. Generally, we don’t recommend retiring and not claiming Social Security for the average American, even if you’re trying to get those delayed retirement credits.
Claiming Social Security and waiting to use your savings is almost always preferable to relying solely on your investment portfolio, even if you have a rather big one.
A steady Social Security stream allows you to:
- Manage your budget: When you have a consistent monthly benefit, you can plan your expenses easier ahead of time. If your other income streams fluctuate, this can be a particularly big benefit.
- Cover unexpected costs: Life throws curveballs, and these seem to always hit at the worst times. With a reliable income stream, you’re better prepared to weather unexpected medical expenses, dips in your other income, and other financial difficulties.
- Invest for additional income: By using your Social Security first, you can use your other income for investments and leave more money invested. This allows your money to grow instead of shrink.
Furthermore, claiming at 67 doesn’t necessarily mean complete retirement. Many retirees choose to continue working part-time, and the additional income can further bolster your financial security while keeping you engaged and active.
Even if you don’t retire completely at 67, claiming Social Security at this age is often recommended.
Personal Fulfillment
Retirement isn’t just about finances. It’s about enjoying the fruits of your labor and enjoying yourself. Claiming Social Security at 67 allows you to maximize the time you have when you’re still healthy and physically able. Even if you’re completely healthy at 67, there is no telling how much longer it will last!
We all hear stories about individuals working until they are far past full retirement age, finally retiring, only to pass away a few months later. Don’t let that happen to you. There is never a perfect time to retire, but full retirement age is pretty close to it for many.
You may have many things you want to do when you’re retired, like traveling or spending quality time with loved ones. Many of these activities require a certain level of physical ability, so it’s important to retire sooner rather than later (while not shredding your budget by retiring too early).
It’s important not to prioritize your financial security so much that you harm other aspects of your life. Yes, having a bigger monthly check can be enticing, but is it worth missing out on extra years in retirement?
If there is any one reason to claim Social Security at 67, it’s this; time often trumps money.
Addressing the Delayed Retirement Credit
Many people delay retirement due to the delayed retirement credit. If you choose to retire at 67, you need to consider this trade-off.
For every month you wait past your full retirement age, your monthly benefit goes up a little. This increase is because you aren’t receiving a check, so the amount that check would have been is spread across the other months the Social Security Administration expects you to draw. Every month this happens, your benefit gets a little boost.
(This is a gross oversimplification, but it works for our discussion. If you want to understand exactly how this works, take a look at our Social Security guide.)
If you retire right at full retirement age, you forfeit these increases. However, as we emphasized above, it isn’t just about finances. Those are months you could spend traveling or engaging in hobbies. If you wait until you’re 70 (when your benefits are maximized), you’re giving up three good years of retirement.
Ultimately, it’s a matter of which is more important to you: time or money. Sometimes, a lack of savings may make the money more worth it. You may also continue to work part-time while drawing Social Security. It doesn’t have to be all-or-nothing, but you shouldn’t maximize for the biggest Social Security check, either.
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