2 Big Reasons Not to Claim Social Security at 65
Key Points
Many people simply need those benefit checks as soon as possible.
Most of us would do best delaying until age 70 to maximize our benefits.
Think through your choice carefully before making a decision.
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Most of us have Social Security benefits to look forward to in retirement, and one of the biggest decisions you'll have to make about that is when to claim them and start the checks rolling in. We can claim our retirement benefits as early as age 62 or we can delay up to age 70.
If you're thinking of just claiming somewhere in the middle, such as age 65, only do so after you've considered the upside and downside of that decision. Here are two reasons not to claim at age 65.
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What difference does it make?
First, know that each of us has a "full retirement age" (FRA) at which we can collect our "full" benefits. It's 66 or 67 for most folks, and 67 for those born in 1960 or later. Consider the following table, showing how much of your full Social Security benefits you'll receive depending on when you claim them:
|
Start Collecting At: |
Full Retirement Age of 66 |
Full Retirement Age of 67 |
|---|---|---|
|
62 |
75% |
70% |
|
63 |
80% |
75% |
|
64 |
86.7% |
80% |
|
65 |
93.3% |
86.7% |
|
66 |
100% |
93.3% |
|
67 |
108% |
100% |
|
68 |
116% |
108% |
|
69 |
124% |
116% |
|
70 |
132% |
124% |
Data source: Social Security Administration.
While you'll clearly get bigger benefits by delaying, remember that you'll receive fewer benefit checks by doing so. Starting early means smaller checks, but many more of them.
1. You may want to claim your benefits earlier
Here's why you might claim your benefits early, such as at age 62:
- You may simply need that income as soon as possible -- perhaps due to a job loss, an early retirement, or health concerns causing you to stop working or to work less.
- Your health may be poor, suggesting that you may live a shorter-than-average life.
- You may have many relatives who died at a relatively young age.
- You may have sufficient other income and don't need to maximize your Social Security benefits.
- You're retiring early and can afford to do so.
- It's part of a coordinated strategy with your spouse.
2. It's probably best to claim your benefits later
On the other hand, you might want to delay claiming your benefits. They'll grow bigger for every year that you delay, up to age 70. There's no reason to delay beyond that age. Delaying as long as possible is smart if:
- You're the higher earner in a couple, and you're trying to maximize your benefit for whoever is the surviving spouse later on.
- You stand a good chance of living a longer-than-average life.
- You want a big benefit check, so that you'll have to rely less on your nest egg.
Various studies have concluded that most (but not all) people would collect the most, in total, from Social Security by delaying until age 70. For example, a 2022 paper from the National Bureau of Economic Research offered this:
We find that virtually all American workers age 45 to 62 should wait beyond age 65 to collect. More than 90% should wait till age 70. Only 10.2% appear to do so. The median loss for this age group in the present value of household lifetime discretionary spending is $182,370.
Each of us needs to think through when to claim for ourselves, factoring in our own situations.
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