One of the most critical decisions that needs to be made is when to start taking Social Security Benefits, when it comes to planning for retirement. The financial future can be significantly impacted due to the choice between beginning the benefits at age 62, 67 or 70. This article discusses about each option with the updated information to help you make an informed decision about the Social Security 62 vs 67 vs 70.
Social Security 62 vs 67 vs 70
At the time of retirement, Social Security benefits are designed to offer financial support. The amount that is received depends on the time you select to start claiming it. Depending on the birth year, the FPA for Social Security is usually between 66 and 67. Yet, the claim assistance can happen as early as 62 or as late as 70. The monthly benefit amount is affected by the decision of Social Security 62 vs 67 vs 70.
Social Security Retirement Age: Overview
| Article On | Social Security 62 vs 67 vs 70 |
| Country | USA |
| Department | Social Security Administration |
| Eligibility | Age, work history or retirement |
| The Minimum amount received at age | 62 years |
| Beneficiary | Eligible Seniors |
| The maximum amount received at age | 70 years |
| Category | Financial Aid |
| Official Website | ssa.gov |
What is the Full Retirement Age?
To receive the total Social Security assistance at the FRA or normal retirement age, you are qualified. This age depends on the birth date. As you have attained the FRA, if you were born in 1957 or earlier.
As per the present law, if you were born in 1958 or later, then your FRA can be between 66 and 8 months and 67 for those born in 1960 or after.
More about the Social Security 62 vs 67 vs 70
Social Security at Age 62
Starting the Social Security benefits at 62 can be appealing, particularly if you want to enjoy your retirement to the fullest. Still, they are a necessary concern in the Social Security 62 vs 67 vs 70 debate.
Advantage
- Early Access: As soon as you turn 62, you can start receiving the benefits, which might be tempting if you plan to retire timely or need income earlier rather than later.
- Flexibility: Starting the benefits early offers more elasticity in how to handle the retirement assets.
Disadvantage
- Longevity Risks: If you live a longer life, the decrease in benefit might result in less total income over the lifetime as compared to waiting until the full retirement age or 70.
- Reduced Benefits: There will be a permanent reduction of the monthly benefit if it starts at 62. Before your FPA, the claim should be made for every year. There would be a reduction in assistance by roughly 6.7% for the first 3 years and 5% for every further year.
Social Security at Age 67
The full benefit amount will be received by claiming Social Security benefits at the Full Retirement Age of 67. In the Social Security 62 vs 67 vs 70 comparison, age 62 is considered the standard for many of them. It is because it balances out the trade-offs between starting benefits and waiting for a higher amount.
Advantage
- Full Benefits: You will receive 100% of the calculated benefit amount at the age of 67 without any reduction in it.
- Balanced Approach: This age provides a stable and predictable benefit level, as it compromises between starting early and waiting longer.
Disadvantage
- Delayed Access: You won’t have access to these benefits until you reach 67. Thus, you can use or have them before 67.
- Missed Opportunity for higher benefits: By not waiting till the age of 70, the opportunity to have the higher monthly benefit is missed out.
Social Security at Age 70
The highest monthly benefits will be received by waiting until the age of 70 for the Social Security benefits. This is for the one who wants to maximise their monthly income and thus can afford a delay in having the benefits in the Social Security 62 vs 67 vs 70 decision-making process.
Advantage
- Increased Benefits: There will be greater total benefits over the lifetime, if you expect to live a long life, until the age of 70.
- Higher Lifetime Benefits: For every year, there will be an approximately 8% increase in the monthly benefit by delaying the Social Security benefit until the age of 70. If you live into your late 70s or beyond, then it will significantly boost your income.
Disadvantage
- Opportunity Cost: While waiting, you need to use other income sources or retirement savings, which might lead to facing an opportunity cost.
- Delayed Access: To have the benefits, you have to wait longer, which can be difficult as you might need the income sooner due to health issues.
How to select when to have the Social Security assistance?
The benefit amount that you will receive over your lifetime will depend on the age at which you choose to start claiming the Social Security benefit.
These are the few factors that might be considered when to start to claim for Social Security benefits includes-
- The retirement savings you own.
- The savings that your spouse owns or is entitled to.
- Your well-being and whether you can endure to work more.
- Your transition into retirement or your choice to continue working.
Final Thoughts
The choice of when to start the Social Security benefit is a personal choice that depends on the individual’s circumstances. The Social Security benefit at 62, 67 or 70 each has its set advantages and disadvantages. You can make a decision that aligns with your retirement plans and financial goals by understanding the consequences of each choice.
You can also consult a financial advisor for more detailed information and personalised advice, who can direct the complexities of Social Security and further develop a strategy according to your needs.
Keep in mind that the key towards successful retirement planning is the development of informed decisions depending on the different situations. The best choice can be made for retirement, and a secure financial future is ensured, by considering the Social Security 62 vs 67 vs 70.
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