Best Time to Claim Social Security Benefits

The age that you begin Social Security benefits has a huge impact on the size of your monthly benefit payments. By the age of 62, you will be eligible to claim Social Security benefits. However, you will be eligible for 100% of your retirement benefits at the age of 65. Your monthly benefit amount will be permanently reduced if you start any earlier, and permanently increased if you wait up until age 70. For instance, if you begin your retirement benefits at age 70, the monthly benefit will be 32% larger than if you began at full retirement age.

What is the best age to start your retirement benefits?

Are you still working? Some people, especially construction workers and other physical laborers, are less able to handle work at 62, even though they don't qualify for disability. They may be good candidates for early retirement.

However, if you're still able-bodied and interested in working, you might want to avoid claiming early retirement benefits. If you're earning a high salary, you'll miss the opportunity to boost your Social Security payment amount.

How's your health? If you're convinced - either by genetics, research, or the amount of time you spend in doctors' offices -- that you'll have a shorter lifespan than your peers, it doesn't make much sense to delay your retirement benefits although your benefit payments get permanently reduced.

What's your break-even point? If you had a good idea of when you were to die, you could compare your total benefit payments under all three common scenarios - age 62, full retirement age, and age 70. Financial planners prefer to calculate your break-even point -- that's the age at which two of your total lifetime benefit amounts become equal to each other.

If you expect to live longer than average, it would be smart to delay the start of benefits up to age 70 if possible, so that a larger monthly benefit is received for the rest of your life. That extra money might well be needed in your later years, particularly if you are running low on other retirement resources.

What will you do with the money?  If you plan to invest the money, your investments would need to earn more than 7% annually to equal what you would make by delaying benefits until full retirement age.

Do you have dependents? Your family's dependents and survivors’ benefits may be reduced if you claim early retirement benefits.

Deciding when to start your Social Security benefits can be complex. To learn more about retirement age options and retirement planning, please email info@gkmtax.com.