What is the Best Age to Claim Social Security?

by Bill Ness on September 23, 2011

Before you decide to begin claiming your Social Security benefits, it is important that you understand how the rules will apply to your own financial situation.

Before you decide to begin claiming your Social Security benefits, it is important that you understand how the rules will apply to your own financial situation.

If you’ve begun thinking about claiming Social Security benefits, you probably have many questions. Should you claim them as soon as you are eligible or wait to maximize your benefits? What are the tax implications and how do benefits differ if you are married?

While visiting Social Security Online is the best way to get up to date information and find detailed answers to your questions, the following information will help you start thinking about what might be the best age to claim your benefits.

When it comes to Social Security, you are eligible for early retirement at age 62, and full retirement between the ages of 66 and 67 (depending on the year you were born). If you wait to claim your benefits after you reach your 70th birthday, you will earn the highest monthly payments.

This change in the monthly amount of your benefits is due to a change in the length of time you will expect to receive payments. If you begin claiming your benefits at age 62, you will receive smaller payments for a longer amount of time. By age 70, Social Security pays a larger monthly amount with the expectation that the payments will not continue as long.

While that may make it sound as if waiting until age 70 is the best answer, that may not always be the case. You have to consider many factors when evaluating your own situation, such as your health and life expectancy, your financial needs, your tax liabilities and whether you will continue to work after you begin claiming Social Security benefits. Even your gender may come into play, as women tend to live longer, but still follow the same benefit distribution as men.

If you are married, it often pays to find out more about spouse benefits. For example, a spouse who earns less than a certain amount may be entitled to up to one-half of the retired spouse’s full benefits. Under certain conditions, the system even allows retirees to put in a claim for spousal benefits when they reach full retirement age, while still deferring their own benefits until they reach age 70.

While Social Security is considered a retirement benefit, many people do continue to work after they begin claiming their benefits. However, you should keep in mind that your monthly Social Security benefits will be reduced for the months when you earn more than a certain amount if you have not yet reached your full retirement age.

According to Social Security Online, about one-third of the people who receive Social Security are required to pay taxes on their benefits. The amount of federal income tax paid on your benefits will depend on your total income received during the year. Social Security benefits may also be taxed at the state level, depending on the rules for your home state.

There is no magic age which is “best” for most retirees. Consider your own needs to make the decision which will be best for you and your family.

{ 1 comment… read it below or add one }

Bill Pearson September 23, 2011 at 4:50 pm

Personally, i’d start drawing it as soon as eligible and begin investing it in the stock market…ouch, that was a joke and a bad one at that.

It really is a personal choice and one that comes with so many variables, they are too numerous to even begin to touch on. We both started drawing at 62, not that we needed the money but the idea we had it in hand was more comforting than hoping somewhere down the road we could get it.

It is like all decisions at retirement…find what works best for you and go for it.

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