70 is the new 62
Don't be shortsighted and claim Social Security early
What is the best age to claim your Social Security benefits? Most people do so soon after age 62 but, most of us should delay until age 70.
First, four basic points to know about Social Security.
You may claim your benefit anytime between age 62 and 70 regardless of when you actually retire. Your benefit is maximized at age 70 so there is no reason to wait longer.
For each year you claim earlier than your so-called normal or full retirement age (now age 67), the benefit is reduced by ~6%. For each year you delay beyond your normal retirement age, your benefit is increased by 8%.
For married couples, after the first spouse dies, the surviving spouse receives the larger of the two benefits.
It's the world's greatest annuity — inflation-adjusted, federally guaranteed, and with a survivor benefit.
Assuming Musk and DOGE don’t unplug it entirely, some simple math can help understand why you should delay claiming to age 70. To keep it simple, let’s say:
you're age 67
your age 67 benefit is $100 per year
If you delay until age 68, you will instead receive $108 per year. You lost $100 of benefits for one year but your benefit will permanently be $8 larger.
How many years do you need to live in order for the extra $8 per year to make up the one-time loss of $100? It is 12.5 years (100/8=12.5). Ignoring the interest on the money, you give up $100 once to get $8 more every year.
So, when you turn 67, if you believe you have ~15 years to live (including some extra years for the time value of money), don’t claim. The average life expectancy of a 67 year old is another 19 years +/-. You can re-assess this decision every month through age 70 as your benefit increases 8% for each year you further delay. Basically, if you think you have 15+ years left in the tank, continue not to claim.
For married couples, the recommendation is stronger. You should maximize the larger benefit so the higher earning spouse should delay claiming to age 70. With two of you, there is a greater likelihood that at least one of you will live to an above average age. By maximizing the benefit of the higher earner, you will maximize the lifetime value for the surviving spouse. If both of you are in good health, you should also delay claiming for the lower earning spouse.
There are two circumstances where it may not make sense to delay claiming.
If your life expectancy is short. However, if you are married, this decision is not so simple if you are the higher earner and your spouse has a normal life expectancy. It may still make sense to delay to maximize the remaining benefit for the surviving spouse.
If you don't have enough savings or income. If you have no other funds to support yourself, then you may have no choice other than to claim early.
If neither situation applies to you, delay claiming until age 70. Your older self will be grateful that you waited as the lifetime value of your payments is likely to be substantially greater than if you claimed earlier.