Most people state that they desire the maximum amount of money possible when deciding when to begin receiving Social Security.
71% of the nearly 3,400 U.S. adults surveyed by AARP recently wanted to maximize their benefits. When claiming Social Security, nevertheless, numerous individuals take different approaches.
Recent data from the Social Security Administration (SSA) reveals that less than 10 percent of the approximately 3.4 million people who began receiving retirement benefits in 2022 were at least 70 years old, the age at which one can secure the highest monthly payment.
The average age of claimants was around 65, with almost a quarter choosing to claim benefits at 62, the earliest eligibility period.
While this trend is a significant improvement from two decades ago, when over half of claimants started Social Security at 62, it still means that many people are potentially leaving substantial sums of money on the table.
Claiming at 70, for example, can result in a benefit as much as 77 percent larger than if claimed at 62.
So, why do so many people opt for smaller monthly payments?
According to Alexander Joyce, president and CEO of ReJoyce Financial in Carmel, Indiana, many individuals feel that they’ve earned their Social Security benefits and want to take them as soon as they’re eligible.
This inclination persists even among high-net-worth individuals who may not require the benefit income at that point to retire comfortably.
Financial advisors typically recommend delaying Social Security claims to maximize monthly benefits.
However, the decision is not solely about securing the most significant monthly check, as health, family, and financial factors are essential in determining when to claim.
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Navigating Social Security: Timing Your Claim
Here are three situations where claiming Social Security benefits early can be justified, as well as three scenarios when it’s more sensible to wait.
1. Poor Health: If you don’t expect to live past a certain age, perhaps due to a chronic medical condition, claiming Social Security benefits early can provide more income in the time you have left.
2. Need to Stop Working: Early retirement may be necessary for individuals in physically taxing jobs or unhealthy working conditions. In such cases, Social Security can help replace lost earnings.
3. Maximize Family Benefits: Strategic claiming decisions can increase household benefits. For example, if your spouse is eligible for a spousal benefit on your earnings record, they can receive it once you’ve claimed it.
Ultimately, the decision of when to claim Social Security should be based on your unique circumstances, balancing financial considerations, health status, and family dynamics.
Planning for retirement involves careful consideration, and seeking advice from financial professionals can help you make the right choice.
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