Is It Better to Collect Social Security at 62, 67, or 70? A Comprehensive Study Presents a Clear Answer.
Key Points
The Social Security Administration relies on four broad-based variables to calculate your monthly check.
Ages 62, 67, and 70 are likely to be some of the most popular Social Security claiming ages moving forward.
A detailed study encompassing the claiming decisions of 20,000 retired workers uncovered a wide variance between actual and optimal claims.
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For most retirees, Social Security is more than a monthly deposit into their bank account. It represents a financial foundation that many would struggle to make do without.
In 2023, Social Security pulled north of 22 million beneficiaries above the federal poverty line, including 16.3 million adults aged 65 and older, according to an analysis by the Center on Budget and Policy Priorities. Meanwhile, 24 years of annual surveys from Gallup have shown that 80% to 90% of retirees lean on their monthly payout, to some degree, to cover their costs.
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The point being that maximizing how much beneficiaries receive from Social Security isn't a luxury -- it's a veritable necessity for most.
But to collect as much as possible from America's leading retirement program, you'll first need to understand how your benefit is calculated. Only then can you truly grasp how much an early (age 62), middle-ground (e.g., age 67), or late (age 70) Social Security claim can swing the monthly and lifetime payout pendulum.
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These four variables are used to calculate your monthly Social Security payout
Without getting into the minutiae, your Social Security check is determined by four broad-based factors:
- Work history
- Earnings history
- Full retirement age
- Claiming age
These first two factors, your work and earnings histories, are intertwined. When the Social Security Administration (SSA) calculates your monthly benefit, it'll take into account your 35 highest-earning, inflation-adjusted years. In theory, if you earned an above-average wage or salary over multiple decades, you should receive an above-average Social Security check.
But there's a catch to this calculation. If you don't have at least 35 qualifying years of work history, the SSA will average a $0 into your calculation for every year less than 35 worked. Regardless of how much you earned annually, you'll have no chance to maximize your monthly payout if you don't have at least 35 years of qualifying work.
Your full retirement age is the third variable used by the SSA to calculate your payout. This is the age you become eligible to receive 100% of your monthly benefit, and it's entirely determined by the year you're born. Anyone born in or after 1960, which encompasses most of today's labor force, will have a full retirement age of 67.
The final criterion, and the one with arguably the greatest influence over what you'll receive from Social Security, is your claiming age. Even though retired workers have the option of taking their payout as early as age 62, their benefit can grow by up to 8% annually for every year they wait to collect, as shown in the following table:
| Birth Year | Age 62 | Age 63 | Age 64 | Age 65 | Age 66 | Age 67 | Age 68 | Age 69 | Age 70 |
| 1943-1954 | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% | 132% |
| 1955 | 74.2% | 79.2% | 85.6% | 92.2% | 98.9% | 106.7% | 114.7% | 122.7% | 130.7% |
| 1956 | 73.3% | 78.3% | 84.4% | 91.1% | 97.8% | 105.3% | 113.3% | 121.3% | 129.3% |
| 1957 | 72.5% | 77.5% | 83.3% | 90% | 96.7% | 104% | 112% | 120% | 128% |
| 1958 | 71.7% | 76.7% | 82.2% | 88.9% | 95.6% | 102.7% | 110.7% | 118.7% | 126.7% |
| 1959 | 70.8% | 75.8% | 81.1% | 87.8% | 94.4% | 101.3% | 109.3% | 117.3% | 125.3% |
| 1960 or later | 70% | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% |
Data source: Social Security Administration.
There are clear pros and cons to collecting benefits at 62, 67, and 70
Every age within the traditional claiming range of 62 through 70 has its own unique advantages and drawbacks. But in the years to come, the extremes (62 and 70), along with a very specific middle-ground age (67), should be especially popular initial collection ages.
Age 62
There are two distinct upsides to the earliest possible claiming age. First, retirees don't have to wait to get their hands on their benefits. The other lure is that an early claim may be viewed as a way to front-run possible Social Security benefit cuts, which are currently forecast to take place in 2033.
On the flipside, collecting at 62 will permanently reduce your monthly payout by 25% to 30%, depending on your birth year. Further, early filers can be exposed to other penalties, including the retirement earnings test, which can result in some or all of your payout being withheld by the SSA if you earn above preset income thresholds.
Age 67
The middle-ground approach is attractive because it guarantees recipients will receive 100% of what they're due, yet they'll still be young enough to enjoy the income they receive. Additionally, since age 67 is the full retirement age for most of the labor force, it represents a logical claiming target.
The potential downside of initially collecting at 67 is that you may be leaving a significant amount of lifetime Social Security income on the table if you live well into your 80s.
Age 70
What makes the patient approach so intriguing is that it guarantees you'll be maxing out your monthly benefit. Depending on your birth year, you'll receive 24% to 32% more per month when collecting at 70 than you'd have received at your full retirement age.
The concern with waiting a full eight years, post-initial eligibility, to collect your first Social Security check is that you might not live long enough to also maximize your lifetime benefit, which is the ultimate goal with Social Security.
The all-important question is: Which initial collection age is best?
Although ages 62, 67, and 70 all have their own unique drawbacks, a comprehensive study published in 2019 presents a clear answer.
Image source: Getty Images.
A statistically superior Social Security claiming age does exist
Six years ago, researchers at online financial planning company United Income published a study (The Retirement Solution Hiding in Plain Sight) that used data from the University of Michigan's Health and Retirement Study to analyze the Social Security claiming decisions of 20,000 retired-worker beneficiaries.
This study extrapolated these claiming choices to determine which, if any, initial collection ages were optimal. In this sense, an "optimal" claim would be one that maximized how much the beneficiary received in their lifetime.
The headline takeaway from United Income was not a surprise: Nearly all beneficiaries made suboptimal claiming decisions.
Since we don't know when we'll die, there's always going to be some level of educated guesswork involved in the Social Security claims process.
Additionally, we all have our own unique set of variables to consider when making our claims decision. This can include our personal health, marital status, financial needs, tax implications, and a host of other factors. The point being that there isn't a one-size-fits-all blueprint when it comes to claiming Social Security benefits.
But there was one finding from United Income's study that really stood out. Researchers compared the initial claims of retirees to the extrapolated optimal claims and discovered that they were almost a perfect inverse of each other.
For example, 79% of the 20,000 retired workers examined chose to initially collect their benefits at ages 62, 63, or 64. However, only a combined 8% of these 20,000 retirees would have optimized their lifetime Social Security collection at these three ages.
When the pendulum swung in the opposite direction, United Income noted that 57% of all analyzed claimants would have maximized their lifetime benefit by waiting until age 70. This was more than 5 times higher than the percentage of retired workers who would have optimized their payout at age 67.
To be abundantly clear, this doesn't mean every future retiree should wait until 70 to collect their payout. Plenty of viable reasons exist for an early claim, including poor health.
Nevertheless, United Income's extensive study clearly shows that a statistically superior claiming age does exist. Future generations of retirees would be wise to consider waiting to collect Social Security.
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