It is imperative to plan for retirement to ensure financial security during your later years. However, numerous factors come into play, including determining how much to save and where to invest it, planning for your activities during retirement, and managing your Social Security benefits. One significant consideration is deciding when to retire and when to begin claiming Social Security.

Full retirement age is considered the “default” age of retirement, but many people do not retire exactly when they reach this age. You can technically retire anytime between 62 and 70, but when you retire will affect your monthly benefit. 

We’ll delve into the maximum benefit you can receive at three key claiming ages: 62, the earliest possible; your FRA; and 70, when you stop earning delayed retirement credits. Looking at the maximum benefit can help you determine when to retire, but this should only be one factor you consider. Your health, financial needs, and savings should also play a big role in your decision. 

Maximum Social Security Benefits at 62

62 is the earliest age that you can begin claiming Social Security benefits, no matter when your full retirement age is. It may seem tempting to skip five years of work and start retirement early, but there is a catch. For every month that you claim early, your monthly benefits will be permanently reduced. 

This reduction can be substantial if you claim right at 62, typically around 30% compared to your full retirement age. 

If you qualify for maximum Social Security benefits based on your income, your monthly check would be $2,710 at age 62. However, most people do not qualify for this maximum check. 

Let’s say your full retirement age benefit would be $2,000 per month. Claiming at 62 would reduce your monthly check to around $1,400 per month. That’s a significant difference. Unless you have significant savings, it’s typically not best to retire early (especially when you consider the income and savings potential that working for an extra five years would give you).

Maximum Social Security Benefits at 67

Your Full Retirement Age (FRA) is the age at which you are eligible to receive your full, unreduced Social Security retirement benefit. This age is currently 67 for those born in 1960 or later, but it gradually increased for people born between 1943 and 1959. You can see your exact full retirement age using the SSA’s online calculator. 

Reaching your full retirement age allows you to receive the full benefits that you’ve qualified for based on your income. You won’t take any reductions, but you won’t have any increases, either. It’s the “baseline.”

Currently, the maximum check you can receive at 67 is $3,911. Once again, though, most people do not qualify for the maximum check based on their income. 

Using the previous example, if you qualified for $2,000 based on your income, you’d receive the full $2,000. 

Maximum Social Security Benefits at 70

While retiring at 67 provides you with your full benefits, you can increase it by delaying claiming Social Security. When you delay, you’ll begin earning delayed retirement credits. When you start claiming, these credits will increase your monthly benefit permanently. 

Simply put, the Social Security Administration takes the money you didn’t receive due to the delay and spreads it across your other checks. The amount is relatively small per month, but it adds up over the years. 

You stop earning these credits at 70. Therefore, it’s best to start claiming at 70, no matter what. Delaying will not benefit you; you will just be leaving money on the table. 

Currently, the maximum check you can receive at 70 is $4,873 – just under another $1,000 from 67 and over $2,000 more from 62. That’s a lot of extra income, and many retirees aim to delay their claim in order to receive it. 

However, it’s important to note that you likely won’t receive more money overall. In fact, you may actually receive less depending on your lifespan. You’re just receiving your money in bigger lump sums. While the bigger checks can be enticing, we have a whole article on why 70 is not the best time to claim Social Security. 

That said, some people may need to delay retirement, but doing so just to maximize Social Security isn’t recommended.

Factors to Consider When Choosing When to Claim Benefits

Looking at the Social Security Benefits at 62, 67, and 70 can help you see how age affects your monthly check. However, Social Security is only one factor you should consider:

1. Financial Need

Immediate financial needs might be a compelling reason to claim benefits at 62, and many people delay retirement in the hopes of a larger check at 70. However, this is only one part of your finances you should consider. 

If you have limited retirement savings, you may want to delay retirement to beef up those savings. This may mean delaying Social Security or claiming while you’re still working and investing that income. 

Either way, it’s important to remember that your decision is permanent. Once you claim, you can’t unclaim. 

2. Health and Life Expectancy

For many retirees, your health should be the factor to base your retirement age on. Yes, you should ensure you have enough retirement income to live off of. However, your health should take precedent in most situations. 

If you have health concerns, you may want to claim benefits early. Waiting too long can result in diminished lifetime benefits. You should use your life expectancy based on your gender but also consider your personal health and family history. 

You may even want to consult your doctor. While thinking about how many years you have left to live is never fun, it’s important to consider when you’re trying to fund those years. 

3. Other Income Sources

Savings and Social Security are the most common income sources for retirees. However, many retirees may have other sources to consider, like rental properties. If you fall into this category, you should consider these income sources when determining when to retire. 

If your other income is substantial, you may care less about Social Security. That said, it’s still best to wait until full retirement age, as Social Security can still provide an ensured income if your other sources suddenly dip. 

Maximizing Your Retirement

Looking at the maximum Social Security benefit can be eye-opening, but you should really be focusing on maximizing your retirement – financially and personally. The optimal claiming age for you is heavily dependent on your goals, other income, and lifestyle. 

If you want to travel the world and have the money to do it, retiring early may be the best option. On the other hand, if you don’t have substantial savings and are in good health, working for a few extra years may be the most helpful option. 

It’s important to consider what you want to do. Someone who wants to travel will need much more money than someone who envisions a future reading books on their back porch. Then, consider how much other income and savings you can count on in retirement. 

Planning for retirement entails imagining different scenarios and running the numbers. The SSA’s retirement benefits calculator can help you estimate your expected benefits at different claiming ages, which will be far more insightful than looking at the maximum benefits of some theoretical person. 

There is no one best claiming age. The key is to find a good balance between time and money. 

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