When you reach age 62, you are eligible to begin receiving Social Security retirement benefits. However, claiming benefits at this early age comes with a permanent reduction in the amount you will receive monthly. While you can start receiving Social Security at 62, financial experts generally recommend waiting for a few more years if possible, as it results in a larger monthly check.
Early Social Security Benefits: What to Expect at Age 62
At age 62, the average monthly Social Security benefit is $1,311. For those with a higher earnings history, benefits can be as high as $2,831. However, if you claim at this age, you face a 25% to 30% reduction in the benefit compared to what you’d receive at Full Retirement Age (FRA), which is between 66 and 67 depending on your birth year. This reduction is permanent, and while you gain immediate access to funds, it impacts your long-term financial security.
Although claiming early provides immediate liquidity, it’s important to consider the long-term consequences on your retirement income. For many, the decision to claim early is driven by financial need. However, delaying Social Security benefits typically increases the monthly amount you’ll receive.
Claiming Social Security at Ages 63 and 64
- Age 63: The average monthly benefit increases to $1,344. While the penalty for early retirement still exists, it’s slightly lower than at age 62.
- Age 64: The average benefit increases further to $1,436. The penalty continues to decrease as you approach Full Retirement Age, and the monthly benefit becomes more aligned with your earnings history.
Claiming Social Security at Age 65
- Age 65: By this age, the average monthly benefit is $1,583. Although you haven’t reached FRA yet, the penalty for early retirement is significantly reduced. Many people opt for retirement around this age to transition gradually, prioritizing health or a slower pace of life.
Full Retirement Age (FRA): 66 and 67 Years Old
- Age 66: For individuals born between 1943 and 1954, FRA is 66. At this age, individuals can receive the full benefit, which averages $1,774 per month. There are no penalties, and the benefit is based on your historical earnings.
- Age 67: For those born after 1960, FRA is set at 67. At this age, the average monthly benefit increases to $1,894, and high earners can receive up to $4,018. Delaying until FRA ensures you receive the full benefit and serves as a benchmark for later increases.
Delayed Retirement Credits: The Benefits of Waiting Beyond FRA
If you continue to work and delay claiming Social Security beyond your full retirement age, you can accumulate delayed retirement credits, which increase your monthly benefit by up to 8% per year for each year you wait until age 70.
- Age 68: At this age, the monthly benefit increases to $1,947 due to these delayed credits.
- Age 69: The monthly benefit increases further to $1,972. While the growth slows, it still represents an improvement over previous years.
Reaching Maximum Social Security Benefits at Age 70
- Age 70: By age 70, the monthly average benefit reaches $2,068. For high-income earners who waited until this age, the maximum benefit can reach $5,108. This is the highest amount one can receive under the Social Security system. After age 70, there are no further increases in benefits, so waiting beyond this point won’t yield additional advantages.
Conclusion: Should You Wait or Claim Early?
The decision of when to claim Social Security depends on your health, financial situation, and life expectancy. Although you can claim benefits as early as 62, doing so means accepting a reduced monthly amount. Waiting until Full Retirement Age (66 or 67) allows you to claim your full benefits, and delaying further until age 70 maximizes your monthly check. Carefully evaluate your financial needs and personal circumstances before making your decision.