When Should You Claim Social Security: At 62 or 70?

Deciding when to claim Social Security is a deeply personal decision that can have significant financial implications.

While many people face this decision as they near retirement, the answer is far from simple.

For some, claiming Social Security at age 62 is the best option, while for others, waiting until age 70 might provide a far better return in the long term.

The critical question remains: Should you claim Social Security at 62 or wait until 70?

Understanding Social Security and How It Works

Social Security provides a consistent income for retirees and individuals with disabilities, as well as other beneficiaries.

The program aims to replace a portion of your pre-retirement income based on the contributions you’ve made to the system throughout your working life.

In the US, you can start claiming Social Security benefits at age 62, but the amount you receive will be less than what you’d get if you wait until your “full retirement age” (FRA).

The Full Retirement Age (FRA) varies by year of birth, generally ranging from 66 to 67 for most individuals.

However, your benefits continue to grow each year if you delay taking them, with the highest payout available at age 70.

The Trade-Off: Early Claiming Versus Delaying

Claiming Early at 62

If you choose to claim Social Security at age 62, you will receive a lower monthly benefit, which is typically about 25% to 30% less than your full retirement benefit.

However, the advantage of claiming early is that you begin receiving payments sooner, which could be beneficial if you have immediate financial needs or health issues that may impact your ability to wait.

Many individuals who claim early do so because they need the funds to cover their living expenses, or they prefer to start receiving the money sooner rather than later.

However, this decision involves the trade-off of receiving lower payments for the rest of your life.

Delaying Claiming Until 70

Delaying your claim until age 70 can greatly increase your monthly Social Security payments.

Delaying your claim for benefits past your Full Retirement Age (FRA) increases your benefit amount by approximately 8% each year.

This delayed “bonus” continues until age 70, at which point your payments reach their maximum potential.

After 70, there is no further increase in payments, even if you continue to wait.

For example, if your full benefit at your FRA is $2,000 per month, waiting until age 70 could increase that benefit to $2,640 per month.

Over time, this could result in a significant difference in total benefits, especially if you live a long life.

The Math Behind Early Versus Late Claiming

While it’s clear that waiting until 70 can increase your monthly benefit, the decision is ultimately about balancing the advantages of receiving a lower monthly amount over a longer period versus receiving a higher monthly benefit for a shorter period.

Let’s break this down with an example comparing different claiming ages.

Table: Comparison of Monthly Social Security Benefits at Different Claiming Ages

In this example, assuming a 20-year life expectancy starting at the age of claiming, we can see that waiting until age 70 results in significantly higher cumulative payments.

Although the early claiming option might provide funds earlier, delaying it allows for greater overall benefits, especially in the long term.

Factors to Consider When Deciding

1. Health Considerations
2. One of the most significant factors to consider when deciding Deciding whether to claim Social Security at age 62 or 70 depends on your health. If you have health issues or a family history of a shorter life expectancy, it may be wise to start claiming benefits early to maximize your potential benefits. On the other hand, if you are healthy and anticipate living into your 80s or 90s, waiting until age 70 could provide a higher lifetime payout.
3. Financial Situation
4. If you have significant savings or retirement accounts, such as an IRA or 401(k), you may be able to delay claiming Social Security and use other funds to support yourself in the meantime. This option allows your Social Security benefits to grow and gives you access to a larger payout later.
5. Work Status
6. If you continue to work after reaching 62, your Social Security benefits could be reduced if your earnings exceed a certain threshold. For 2025, if you earn more than $23,500, your benefits will be temporarily reduced. However, the amount that is deducted will be credited toward your future Social Security benefits once you reach your full retirement age.
7. Spouse’s Benefits
8. If you are married, your decision about when to claim Social Security may impact your spouse’s benefits as well. In some cases, it may be beneficial for the higher-earning spouse to wait until 70 to increase both their own benefit and the survivor benefit for their spouse.
9. Tax Implications
10. Your Social Security benefits may be subject to taxes depending on your income level. If you claim Social Security benefits early and continue to earn income, the additional earnings may increase the taxable amount of these benefits. It’s essential to consider how taxes may affect your overall retirement income.

The Long-Term Benefit of Waiting

For many, the most compelling reason to delay claiming Social Security is the long-term financial benefit.

Waiting until age 70 can result in a much higher monthly benefit, which, when combined with additional retirement income sources, this can lead to a more comfortable and financially secure retirement.

Additionally, delaying Social Security payments can help reduce the likelihood of running out of funds in your later years.

However, it’s important to remember that waiting until age 70 means you are forgoing that money during the years between 62 and 70.

If you need the money now, or if your health is a concern, claiming early may be the right choice for you.

The Bottom Line: No One-Size-Fits-All Solution

Ultimately, the decision about when to claim Social Security is a personal one that depends on a variety of factors.

For some, claiming early at 62 might be necessary to meet immediate financial needs, while for others, waiting until 70 will maximise their lifetime benefits.

It’s essential to carefully weigh your health, financial situation, and retirement goals when making this decision.

If you have the financial flexibility to wait, the larger benefits at age 70 may be the best option.

But if you need the funds sooner, or if your life expectancy is shorter, claiming earlier might be the right choice.

Conclusion

The choice between claiming Social Security at 62 or waiting until 70 is not one that should be made lightly.

With careful consideration of your health, financial situation, and long-term retirement goals, you can make the decision that works best for you.

Understanding the trade-offs involved in early vs. late claiming is crucial to ensuring that you optimise your benefits and secure a comfortable retirement.

Table: Summary of Key Differences Between Claiming Early vs. Delaying

This table clearly shows the increasing benefits of waiting until 70 to claim Social Security, which can provide a significantly higher monthly payout and more long-term financial security.

Ultimately, the decision is yours, but understanding the financial implications of your choice is the key to making an informed decision.