Personal Finance

What's the Early Retirement Age for Social Security?

The net result is that, if you're focused exclusively on maximizing the size of your monthly checks, then it would behoove you to (but no later than age 70) before applying for benefits.

The net result is that, if you're focused exclusively on maximizing the size of your monthly checks, then it would behoove you to hold out for as long as possible (but no later than age 70) before applying for benefits.

Is bigger necessarily better?

That being said -- and this is an important point -- the fact that delaying benefits will make them bigger doesn't necessarily mean you'll end up receiving a bigger total amount by waiting.

This is because the Social Security Administration has designed the benefit formula to yield the same amount in aggregate lifetime benefits regardless of the age at which the average American takes them.

If you take benefits at the early retirement age of 62, then the checks will be smaller, but you'll get more of them. Meanwhile, if you wait until 70, you'll get far fewer checks, but they'll be substantially larger.

The breakeven point -- that is, the age at which you will have received the same total amount whether you claimed benefits at 62 or 67 -- is age 77. Before that age, the typical Social Security beneficiary receives more in lifetime benefits by electing to take them early. But after that age, the retiree who delays benefits pulls further and further ahead thanks to those larger monthly checks.

The bottom line on the early retirement age

At the end of the day, the decision regarding when to take Social Security benefits boils down to need and quality of life. If you need them, take them. If you don't need them, and you expect to live out a long retirement, there's little reason not to let them grow. That said, you may decide that even though you don't need to take benefits early, you'd like to enjoy that extra income sooner rather than later. There's no one-size-fits-all solution -- it all comes down to what you feel is best for you.

How to get even more income during retirement

Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

The article What's the Early Retirement Age for Social Security? originally appeared on Fool.com.

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