One of the most direct ways to receive larger Social Security checks is by delaying your benefits. The longer you wait past age 62 to apply, the higher your monthly payments will be. Waiting until age 70 will result in the maximum possible payouts based on your work history, maximizing your benefits.
Recent research indicates that for the vast majority of individuals, filing at age 70 is the most financially advantageous choice. A study conducted in 2022 by the National Bureau of Economic Research examined how the age at which benefits are claimed impacts lifetime income, as well as the potential loss incurred by claiming at less-than-ideal ages.
The study found that 91.6% of workers could optimize their Social Security benefits by applying at age 70, while a significant 99.4% could maximize their benefits by waiting until at least age 65 to begin claiming. Across all age brackets, the median amount missed out on by filing at a suboptimal age is $158,069. Those aged 45 to 54 could stand to lose even more, with the median household potentially forgoing $271,790 over their lifetime by ultimately filing at a less-than-optimal age.
It is crucial to consider that this study solely focused on the financial benefits of filing at specific ages. While finances are a key aspect of this decision, it is prudent to take a holistic approach when determining the ideal age to apply for Social Security.
Another critical factor to weigh is your overarching retirement objectives. If your primary aim is to maximize your Social Security benefits, waiting until age 70 to file is likely the most advantageous route. However, if your main goal is to enjoy an extended retirement period, opting for early claiming can sometimes prove beneficial.
Although possible, retiring early and then delaying Social Security filing can be challenging unless you have substantial savings. For many individuals, relying partly on their benefits to meet expenses necessitates filing earlier to make early retirement viable.
Furthermore, while not a pleasant deliberation, your life expectancy also plays a role in this decision. If you anticipate a lifespan that may not extend into your 80s or beyond, delaying benefits until age 70 might not be the most sensible choice. Although claiming early decreases your monthly payments, if you have a shorter-than-average lifespan, you could potentially accrue more benefits over your lifetime.
Determining when to take Social Security is a significant decision that requires careful consideration. By evaluating your priorities and overarching retirement aspirations, you can make an informed choice tailored to your unique circumstances.
The $22,924 Social Security bonus that many retirees overlook highlights the importance of maximizing retirement income. Discovering little-known “Social Security secrets” can potentially enhance your financial well-being. Learning strategies to optimize your Social Security benefits can provide you with the confidence to retire securely and peacefully. To explore these strategies further, click here.
