Social Security is one of the most flexible government programs available, giving seniors the ability to start collecting benefits as young as 62.
However, the amount you collect varies with age. Since 62 isn’t considered full retirement age, your benefits can be cut. Waiting until full retirement age means you’ll get to collect even bigger benefits. For Americans, full retirement age falls between 65 and 67, depending on your year of birth.
Still, 62 is the most popular age to start filing for Social Security, and only 4% of men and 2% of women wait until age 70, meaning anywhere from 96 to 98% of people are missing out on getting bigger Social Security checks.
If you start claiming Social Security before reaching full retirement age, your check amount will be reduced by 30%. Waiting until age 70, though, means you will receive up to 24% more of your base benefit amount.
Let’s say your benefits were $1,400 per month ($16,000 per year). If you claimed them at 62, those monthly benefits would drop to $980 per month. Claiming at 70 would bump those benefits up. You’d instead receive $1,736 per month, which can really add up over time. Your lifetime benefits for this amount if you start claiming at 62 come out to about $329,280 total. However, if you wait until 70 your benefits total about $416,640. This is a huge difference!
If you decide to work until 70, you’ll also be growing your nest egg during those years you keep working. This gives you a little extra cash and may give a better financial outlook during retirement.
The best thing you can do for your Social Security benefits? It’s simply being patient. Of course, not everyone will be able to put off claiming Social Security benefits until they’re 70 years old. Your financial situation and health outlook are two of the main factors you should take into consideration when making the decision.