Retires need to decide when to claim Social Security benefits. This decision could greatly impact the monthly benefit amount and overall financial stability in retirement. Recent data from the Social Security Administration highlights the most common ages at which retirees choose to begin their benefits and the average monthly benefits associated with these choices.
Age 62: The Most Common Choice
Approximately 23% of males and 24.5% of females decide to start receiving Social Security checks at age 62, making it the favorite age for early claimants. This will give earlier access to benefits that are critical for those who may require temporary money supplements or have reasons to believe that their lives might be cut short due to illness. However, this comes with a reduction of 30% of your monthly payments. During 2022, an average monthly payout was $1,287.61 among individuals starting their allowances at 62 years old; that means $1,444.42 if adjusted for cost-of-living increases.
Age 65: Medicare and Social Security
This is a particularly significant age because that’s when you can first qualify for Medicare, a federal health insurance program for seniors. Most retirees claim Social Security during this period to coincide with their Medicare enrollment. Around 13.3% percent of men and 13.4% percent of women filed applications between such an age limit before attaining full retirement but with reduced benefits.
The average 65-year-old claiming Social Security for the first time in 2022 received $1,874.56 monthly. Adjusted for the last two COLAs, they receive the equivalent of $2,102.85. However, considering that payment starts early, you will get a smaller benefit or may owe money at the end of the year due to your earnings.
Wait Until Age 70
Although the number is relatively small, only 8.6% of men and 9.5% of women waited until age seventy to claim their Social Security benefits in 2022, which was a significant increase from prior years. It means that an individual with a full retirement age should wait until age seventy before making such a decision due to the benefits mentioned above, which include an annual increment equaling 8%.
In 2012 only 1.4% and 2.2% of men and women correspondingly went for this option, showing that more seniors are starting to realize the advantages associated with patience today; therefore, if your financial conditions allow you, then claiming at age 70 will give you the highest possible monthly benefits and thereby provide some cushion against any eventuality during old age.
Full Retirement Age: A Balanced Approach
Another significant milestone is reaching full retirement age, which varies based on your birth year. If one retires in 2022, the full retirement age will be either 66 years and 2 months or 66 years and four months, depending on a child's birth year. At this stage, individuals can claim their full pensions without penalties, provided they have contributed through taxes during their working years.
Some retirees prefer to start Social Security benefits immediately upon reaching full retirement age (age 66), with 15% of men and 13.4% of women choosing this approach. Others may wait until later to maximize their benefits. The average benefit for someone retiring at the age of 66 was $2,241.66, which meant that after adjusting for price rises, it is equivalent to $2,514.66. This approach strikes a good balance between maximizing benefits and not waiting until the highest age.
Not sure what's your retirement age? Use the Social Security's calculator to find out.
When Is the Best Time to Claim Your Social Security?
The optimal age to claim Social Security benefits varies based on individual circumstances. For those without a spouse or ex-spouse, waiting until age 70 can be advantageous if financially feasible. This strategy maximizes your monthly benefit and helps preserve personal savings for a potentially longer retirement.
Waiting until age 70 offers an 8% annual increase in benefits for those born in 1943 or later. If your finances allow, considering this approach could benefit you in the long run.
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