1 Simple Social Security Question That Could Make or Break Your Retirement | Personal-finance


There are countless factors that will affect how much you receive from Social Security each month, including the number of years you’ve worked and your income throughout your career.

But there’s one factor, in particular, that could potentially make or break your retirement, and it’s a question every soon-to-be retiree should be asking themselves: What age will you begin claiming benefits?

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How your age will impact Social Security

Once you turn 62 years old, you become eligible to begin receiving Social Security checks. Age 62 is also the most popular time to claim, with roughly 35% of men and close to 40% of women filing at that age, according to a 2020 report from the Bipartisan Policy Center.

You don’t have to file at age 62, though. It’s also possible to begin claiming at any age thereafter, and by doing so, you’ll receive higher payments. In some cases, this can add up to hundreds of dollars per month.

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For example, say that age 67 is your full retirement age (FRA), or the age at which you’ll receive the full benefit amount you’re entitled to based on your work record. Let’s also say you’re receiving $1,600 per month at that age, which is roughly the average benefit amount among retirees.

If you were to file as early as possible at age 62, your checks would be reduced by 30%, leaving you with $1,120 per month.

However, if you were to delay benefits until age 70 (which is the longest you can wait while still receiving a bonus amount), you’ll receive your full benefit amount plus an extra 24% each month. That comes out to $1,984 per month — a whopping $864 more per month than you’d receive by filing at age 62.

When should you start taking benefits?

While it may seem like waiting until age 70 is ideal, that’s not the right strategy for everyone.

If you already have a robust retirement fund and don’t necessarily need the extra cash, for example, claiming early can help you get a jump-start on retirement. Or, if you lose your job and are forced to retire sooner than expected, filing for Social Security early can provide some extra income.

Also, if you have reason to believe you may live a shorter-than-average lifespan, you could actually receive more over a lifetime if you file as early as possible. After all, if you live until, say, age 75, it doesn’t make much sense to wait until 70 to start taking benefits.

The best reason to consider delaying Social Security is if you want to maximize your monthly income. Again, you could collect hundreds of dollars more per month by waiting a few years to file, and if your savings are falling short, that extra money could make a huge difference.

There’s not necessarily a right or wrong answer as to when you should file for Social Security, but it is an important question to ask yourself before you retire. By claiming at the best age for your situation, you can set yourself up for a more enjoyable retirement.

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