One of the most important retirement decisions you’ll ever make is when to claim Social Security.
Most retirees can claim their monthly benefit starting at age 62, but waiting to claim results in a bigger monthly check from the government. Your benefits typically max out at age 70.
That leaves a lot of options for retirees. Many financial decisions often benefit from following the wisdom of the crowd. Aggregating the decisions and estimates of millions into an average might provide a better guide to what you should do than following a single person’s advice.
But if you follow the average retiree’s claiming strategy, you may end up worse off over the long run in retirement.
Here’s the average age retirees claim Social Security
The average age at which retirees claim Social Security has climbed steadily since the start of the 21st century. That’s in large part due to changes in Social Security laws.
Congress passed new legislation in 1983 that raised the full retirement age from 65 to 67 in two tranches. The first tranche happened in the early 2000s, when workers born in 1937 or later saw their full retirement age climb to eventually reach 66. The second tranche is currently taking effect as workers born in 1955 or later gradually see their retirement age increase to 67. That transition will end in 2027.
Since full retirement age determines when someone becomes eligible for their standard benefit, or primary insurance amount, the country saw a significant increase in the average claiming age as workers adjusted to the change to Social Security in the 10 years from 2004 to 2014. The average retiree claimed benefits at age 63 and 4 months in 2004. A decade later, the average had climbed by about one year, and it’s likely to see another leg up as Americans adjust to getting full retirement benefits at age 67.
Today, the average retiree claims benefits at age 65, according to the most recent data provided by the Social Security Administration about new retirement benefits awarded in 2022.
The two most popular claiming ages are 62 (the first year of eligibility) and 66. Less than 10% wait until age 70 to max out their monthly benefit.
Here’s the average new benefit claimants receive
In 2022, the average retirement benefit for new claimants (not including conversions from disability) was $1,938.75. That translates into a 2024 benefit of $2,174.86 based on the cost-of-living adjustments (COLAs) for 2023 and 2024.
It’s worth pointing out, though, that the average benefit for those who claimed at age 65 was less than the average benefit. The average 65-year-old claiming benefits in 2022 received just $1,874.56 per month. There are a couple of explanations for this discrepancy.
First, the amount your monthly check increases each month leading up to your full retirement age is less than the increase your benefits get when delaying beyond full retirement age. You receive an additional 5/12 of 1% to 5/9 of 1% of your full retirement benefits for each month you get closer to your full retirement age. Wait past full retirement age, and you receive 2/3 of 1% of your standard benefit for each month you delay.
The second explanation is that low-income workers claim benefits earlier than high-income workers, on average. Their primary insurance amount is notably lower than that of those who wait until age 70. That early claiming makes sense in cases where careers may have been cut short, or a person doesn’t have enough personal retirement savings to get by without claiming Social Security early.
Should you claim at the average retirement age?
As mentioned, the wisdom of the crowd can serve as a guide as you forge your own path. Claiming at age 65 makes intuitive sense for many. It’s long been held as the standard age for retirement (perhaps a holdover from the original Social Security law). It’s also the age when you become eligible for Medicare, making it easier to leave your job.
But claiming Social Security at age 65 could be a mistake for many retirees, according to cold hard data and several extensive studies.
If you want to maximize your lifetime benefits from Social Security, you’re most likely to do so by waiting until age 70 to apply. Life expectancy data from the CDC show the average person in their 60s will live long enough to receive more in benefits during their lifetime by waiting to claim. So, unless you have reason to expect you’ll have a shorter-than-average lifespan, you’ll likely get more benefits by delaying as long as possible.
A study conducted by United Income in 2019 also shows that most retirees would maximize their wealth by delaying until age 70. 57% of households would maximize their chances of being able to afford their retirement by waiting to claim until age 70. In comparison, just 8% of households are better off claiming before age 65.
Keep in mind that retirement planning is heavily dependent on personal circumstances. What works for one person may be a bad decision for another. The wisdom of the crowd can only take you so far. You need to determine what works best for you.
