Social Security Retirement: Is it better to take Social Security at 62, 67, or 70?

Social Security Retirement: Choosing the best age to retire is a personal decision influenced by various factors, including the amount of money you will receive from Social Security once you stop working.

The full retirement age, which is the age when you can receive your full Social Security benefits, depends on the year you were born. For those born between 1943 and 1954, the full retirement age is 66. For those born after 1955, it ranges from 66 years and two months to 67 years old, depending on the specific year of birth.

You have three main options for when to retire. The first option is retiring at age 62, where you can start receiving Social Security benefits early, but your monthly benefits will be lower since you’re taking them before reaching your full retirement age. The second option is retiring at your full retirement age, which allows you to receive your full Social Security benefits, though you may need to work longer than you initially planned.

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The third option is retiring at age 70, which provides the highest possible monthly benefits because you delayed taking them, though this means waiting longer to start receiving benefits, which might be challenging if you need the money sooner.

Early Social Security Retirement

You should be aware that the Social Security Administration (SSA) will take away a portion of your potential benefits for each month you choose to retire before reaching full retirement age.

There are several factors involved in this complex computation. Ultimately, though, you would only receive 70% of the amount if you retired at age 62 instead of waiting until full retirement age.

The annual percentages would be as follows:

Retirement age — Percentage

• 63 years — 75%
• 64 years — 80%
• 65 years — 86.67%
• 66 years — 93.33%

Making the decision to retire early has the benefit of extending your benefit period even though your payment will be lower. If you are unsure if you can afford a reduction in your retirement pension, consider your other income streams (private insurance, investments, and savings) before making the decision.

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Late retirement

If you choose to delay your retirement beyond your full retirement age and up to age 70, you can earn a delayed retirement credit (DRC). This means that for every month you delay retirement after reaching your full retirement age, your Social Security benefits increase.

For example, if your full retirement age is 67 and you retire at age 68, your benefits would increase by 8%. If you wait until age 69, you would receive 16% more, and if you retire at age 70, your benefits would be 24% higher. However, there is no additional benefit to delaying retirement beyond age 70.

Delaying retirement also allows your future cost-of-living adjustments to be based on a higher benefit amount. When deciding whether to delay retirement, consider your physical health and whether you can continue working beyond your full retirement age.

No matter when you plan to retire, it’s important to consult a financial expert. They can help you determine whether you can afford to retire early based on your income, assets, and savings or if it’s better to wait and maximize your Social Security benefits.