When is the ‘Right’ Time to Claim Social Security

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When to claim Social Security benefits is one of the bigger X factors in the retirement planning process.

On the one hand, the longer you wait to retire and claim your benefits, the more you’ll get each year for the rest of your life. On the other… yolo. Maybe retiring on the earlier side is right for you and you can adjust to make up for the smaller monthly payments.

It’s a very personal decision.

The rules: Every American who has worked for at least 10 years and paid into the system qualifies for Social Security retirement benefits when they turn 62. That’s the good news. But “full” benefits based on your work history don’t kick in until you’ve reached your full retirement age to sign up —  66 for those born between 1943 and 1954, rising by two months per year until it reaches 67 for those born in 1960 and later.

By the numbers: The idea here by the Social Security Administration is that every qualifying American gets “amount X” in benefits based on their work history and how much they’ve paid into the system. Those who wait until later to start claiming it get larger cheks each month on the logic that they will be living fewer years and receiving benefits for a shorter length of time than those who claim at 65 or earlier.

  • Start at 62: You’ll only get 70% of your full benefit per check if your full retirement age is 67 (or 75% if your full age is 66)
  • Wait and maximize: On the flipside, if you wait until you’re 70 to start claiming benefits you’ll get 124% of your full benefit per check if your full retirement age is 67 (or 132% if it’s 66).

That’s a big difference. So, what’s the “right” answer?

There isn’t one. There are many factors to consider when choosing exactly when to retire and start claiming benefits, and the cash value of your checks is only one of them. Health concerns, travel plan, family needs, etc… it all plays a part in the decision. And after all, Social Security is just one part of your overall retirement plan, so while the value you get out of the system is important you shouldn’t base your decision entirely on that. If you can keep working until you’re 70 and want to, go for it. You’ll get a nice monthly boost once you do retire. But that doesn’t mean that there isn’t good reason for some people to retire at 62 too.

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