In some cases, it pays to file early.
The age you begin claiming Social Security will affect your monthly income for the rest of your life, so it’s critical to choose wisely.
Delaying benefits will result in larger payments each month, so that may seem like a smart idea to maximize your income. In some cases, that can be the best possible move to enjoy a more financially secure retirement — but it won’t be the right option for everyone.
While everyone’s situation will be different, there’s one good reason to consider filing for benefits earlier: you can change your mind later.
When claiming early can be smart
When you file for Social Security before your full retirement age (FRA), it will result in smaller checks. But one advantage is that it’s also easier to reverse your decision if you change your mind.
Within the first 12 months of claiming, you have the option to withdraw your application. You will need to pay back all the money you’ve received so far in benefits, but then you’re free to file again anytime thereafter.
If withdrawing your application isn’t an option, you could suspend your benefits instead. Once you reach your FRA, you can stop collecting benefits up to age 70. When you reapply, then, you’ll start receiving larger payments.
While it’s still wise to do your research before you file to ensure you’re claiming at the best age for your situation, sometimes unexpected circumstances arise. If you file early and change your mind, you can reverse your decision. But if you delay benefits and then regret it, there’s not much you can do at that point.
When you may be better off delaying Social Security
That said, there are also some situations where claiming early could put you at a disadvantage. There’s no right or wrong time to begin claiming, so one person’s ideal age may not work for you.
Perhaps the best reason to consider delaying Social Security is if you know your savings will be falling short in retirement. The longer you wait to file for benefits (up to age 70), the more you’ll collect each month. This can sometimes result in thousands of dollars more per year, which can go a long way.
For example, the average retiree collects around $1,800 per month in benefits as of March 2023, according to the Social Security Administration. If you have an FRA of 67 years old and would receive $1,800 per month at that age, filing at 62 would reduce your benefits by 30%, leaving you with $1,260 per month.
If you were to delay benefits until age 70, however, you’d receive your full benefit amount plus an extra 24% each month, or $2,232 per month. That’s an additional $972 per month over what you’d collect at 62, which adds up to nearly $12,000 per year.
Which option is right for you?
When you decide to start taking Social Security is a highly personal decision, and again, there isn’t necessarily a right or wrong answer.
If your primary goal is to maximize your monthly income, delaying benefits may be your best option. Also, if you expect to live a longer-than-average lifespan, those larger checks can go a long way if your savings eventually run dry.
On the other hand, if you’re on the fence about when to claim or you don’t need the extra cash each month, filing early can be smart. You never know what kind of curveballs life can throw at you, and keeping your options open may help you ease into retirement more smoothly.
Choosing the right age to file for Social Security isn’t always easy, but it pays to consider how your situation will affect your decision. The more thought you put into your strategy, the more prepared you’ll be in retirement.
