For the majority of people in retirement, Social Security is far more than just a recurring deposit; it serves as a crucial financial safety net that would be difficult for many to live without.
According to the Center on Budget and Policy Priorities, Social Security kept over 22 million recipients above the federal poverty threshold in 2023, among them 16.3 million seniors aged 65 and older. Over the past 24 years, Gallup surveys have found that 80% to 90% of retirees depend, at least in part, on their monthly Social Security checks to help cover expenses.
In other words, ensuring you receive the highest possible Social Security benefit isn’t just a bonus—it’s essential for most retirees.
However, before you can maximize your payments from the nation’s primary retirement program, it’s important to understand the formula behind your benefit. Only with this knowledge can you truly see how your chosen claiming age—whether early (62), at full retirement (67), or late (70)—will impact your monthly and lifetime benefits.
Image credit: Getty Images.
Four main factors determine your monthly Social Security payment
Without diving into all the fine details, your Social Security amount is based on these four primary elements:
- Work record
- Income record
- Full retirement age
- Age when you claim benefits
The first two—work and income history—are closely linked. The Social Security Administration (SSA) calculates your benefit using your 35 highest-earning years, adjusted for inflation. Generally, if you consistently earned a higher income, you can expect a larger benefit.
There’s a caveat, though. If you have fewer than 35 years of qualifying work, the SSA includes a $0 for each missing year in their calculation. No matter how much you made in your best years, you can’t maximize your benefit without at least 35 years of eligible work.
The third element, your full retirement age, is the point at which you’re eligible to collect your entire scheduled benefit, and it depends on your birth year. For anyone born in 1960 or later—a category that includes most current workers—full retirement age is 67.
The last factor, and arguably the most influential, is your claiming age. While retirees can start collecting as early as 62, delaying your claim can increase your monthly benefit by up to 8% per year, as outlined in the following chart:
| 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% |
Source: Social Security Administration.
Claiming at 62, 67, or 70: Weighing the pros and cons
Every age within the typical claiming window—from 62 to 70—comes with its own set of benefits and drawbacks. However, in the years ahead, claiming at the earliest (62), full (67), or the latest (70) ages will likely remain the most common choices.
Age 62
Claiming benefits at the earliest possible age offers two key advantages. First, retirees start receiving payments right away. Second, some see claiming early as a way to get ahead of possible Social Security benefit reductions, which are currently projected for 2033.
However, starting benefits at 62 leads to a permanent decrease in your monthly payment—typically 25% to 30%, depending on your birth year. Early claimants may also face additional reductions, such as the retirement earnings test, which can cause the SSA to withhold benefits if you earn over certain limits.
Age 67
Choosing to claim at 67 is appealing because you receive your full scheduled benefit, and you’re still young enough to enjoy the income. Since 67 is the full retirement age for most workers, it’s an obvious target for many.
The downside is that if you live a long life, starting benefits at 67 could mean missing out on the extra income you would have received by delaying until age 70.
Age 70
The main advantage of waiting until 70 is that you’ll receive the maximum possible monthly benefit. Depending on when you were born, your payment could be 24% to 32% higher than what you’d get at full retirement age.
The risk in holding off until 70 is that you may not live long enough to fully benefit from the higher payments, which is the ultimate goal for many retirees.
The most important question remains: Which age offers the best outcome for your initial claim?
While each starting age—62, 67, and 70—comes with its own disadvantages, a comprehensive 2019 analysis provides a clear perspective.
Image credit: Getty Images.
There is a statistically optimal age to claim Social Security
Six years ago, analysts at United Income, an online financial planning service, published research titled "The Retirement Solution Hiding in Plain Sight." Using data from the University of Michigan’s Health and Retirement Study, they examined the claiming patterns of 20,000 retirees collecting Social Security.
The research projected these claiming behaviors to evaluate whether certain ages produced the best possible lifetime benefit. In this context, “optimal” means the age that would provide the greatest total payout over the course of a retiree’s life.
The main takeaway from United Income’s study was unsurprising: Most people did not pick the age that would have maximized their benefits.
Because none of us can predict our lifespan, there will always be some guesswork in deciding when to claim Social Security.
On top of this, everyone’s situation is different. Personal health, marital status, financial needs, taxes, and other considerations all play a role in the decision. This means there isn’t a universal answer for everyone regarding the best time to claim Social Security.
But one result from the study stood out. When researchers compared actual claiming ages to the calculated optimal ages, they found the choices were nearly the exact opposite of what would have been ideal.
For instance, 79% of those 20,000 retirees began collecting benefits at either 62, 63, or 64. But only a combined 8% would have received the highest possible lifetime benefit by claiming at those ages.
On the other hand, the data showed that 57% of retirees would have been better off waiting until 70 to maximize their lifetime Social Security, which is more than five times the number who would have optimized their payout at 67.
To clarify, this doesn’t mean everyone should delay claiming until 70. For some, especially those in poor health, starting earlier can be the better choice.
Still, United Income’s research makes it clear that, statistically, there is indeed an age that tends to yield the highest lifetime benefit. Future retirees should carefully weigh the benefits of postponing their Social Security claim.
