Is it better to take Social Security at 62, 66, or 70? A comprehensive study of pensioner claims provides a clear answer.

More than 68 million Americans took home Social Security benefits in September, including nearly 51.5 million retirees. Although the average retiree paycheck is a modest $1,921.56, this income has proven vital to retirees’ financial well-being.

The poverty rate for adults 65 and older was 10.2% in 2022, according to an analysis by the Center on Budget and Policy Priorities. If Social Security did not exist, the poverty rate among older adults would rise to approximately 38.7%.

Moreover, the Gallup National Poll has surveyed retirees every year since 2002 to assess their dependence on Social Security income. Responses indicate that 80% to 90% (including 88% in 2024) rely on their benefits to some extent to cover their expenses.

Getting as much benefit as possible from Social Security is a must for most current and future retirees. But to do this, you need to understand all the intricacies of calculating your benefit, and also make the most informed decision regarding your claiming age. This way, you’ll know whether taking benefits early (age 62), taking a compromise approach (age 66), or waiting patiently (age 70) is the best choice.

There are four variables used to calculate your monthly Social Security check.

While Social Security may throw up a surprise or two for future beneficiaries—benefits may be taxed at the federal level as well as in nine states, for example—there is complete transparency in how your benefit is calculated. The Social Security Administration (SSA) relies on four variables to determine how much you will receive each month:

Your work history and income history are linked. When calculating your monthly Social Security check, the SSA will consider your 35 highest earning years, adjusted for inflation. This means that if you’ve earned a lot in wages over many decades, you’ll likely receive an above-average monthly benefit in retirement.

The caveat to the above is that the SSA will also penalize you if you have not completed 35 years in the workforce. For every year of employment of fewer than 35 people, the SSA will include, on average, $0 in your calculations.

The third factor, your full retirement age, is determined by the year you were born and is the age at which you are eligible to receive 100% of your monthly benefit. This is the only variable of the four that you cannot control.

The fourth component that has the potential to really impact the monthly and lifetime payment pendulum is the age of your claim. Although eligible retirees can begin taking distributions at age 62, there is a very clear monetary incentive to be patient. For each year a worker waits to receive a Social Security check from age 62 until age 70, their benefit can increase by up to 8%. You can see how this solution works in the table below.

Data source: Social Security Administration.

Taking benefits at age 62, 66, and 70 has distinct advantages and disadvantages.

Despite the difference in monthly payments you see above, all nine ages within the traditional age range of 62 to 70 have distinct advantages and disadvantages. The ages of 62, 66 and 70 should be among the most popular for initial collection in the coming years. Let’s take a closer look at the pros and cons of filing a claim at the appropriate age.

Age 62: The most attractive aspect of taking benefits at age 62 is not having to wait to receive benefits. This is likely why age 62 was the most popular filing age for 2022 among retirees.

Additionally, the Social Security Board of Regents report has warned for four decades that benefit cuts could occur. Asset reserves for the Old Age and Survivors Insurance (OASI) Trust Fund, which distributes benefits to retirees and survivors of deceased workers, are expected to be depleted by 2033. If OASI’s asset reserves are depleted, the steep benefit cuts increasing to 21% could wait. Applying for benefits as early as possible can be seen as a way to get early payments ahead of a possible cut in nine years.

On the other hand, the earliest filing age may expose beneficiaries to several early filing penalties. This includes a permanent reduction of 25% to 30% in your monthly benefit, depending on the year you were born, as well as potential participation in the Retirement Earnings Test. This “test” allows the SSA to withhold some or all of your benefit if your income is above a certain threshold.

Age 66: The popularity of the average requirements approach cannot be denied. Age 66 was the second most popular filing age for retirees in 2022, behind only age 62. The beauty of taking benefits at age 66 is that it minimizes permanent reductions in your monthly benefits, while also providing income while you’re still young enough to enjoy it.

Conversely, most of today’s workforce (those born in 1960 or after) have reached the full retirement age of 67. This means that 66-year-old claimants will still be subject to a small permanent reduction in monthly payments, as well as a pension earnings test as long as they reach full retirement age.

What’s more, if you live to age 80, there’s a good chance you’ll leave a lot of Social Security income on the table with a claim on the middle ground.

Age 70: Meanwhile, the benefit of taking benefits at age 70 has to do with maximizing what you’ll receive each month. Depending on the year you were born, filers aged 70 will receive between 24% and 32% more per month than they would have received at full retirement age.

On the other hand, you’ll have to wait eight years from your original eligibility date before you receive a penny from Social Security. Even with the maximum possible monthly payout, there is no guarantee that you will live long enough to maximize your lifetime income from America’s leading retirement plan.

Statistically, one age is more likely than others to maximize lifetime benefits.

To better understand how your benefit is calculated, and the consequences of claiming early, midway, or waiting, let’s answer the most important question of all: Is it better to take Social Security at 62, 66, or 62? 70?

Honestly, there is no specific answer that would be correct 100% of the time. The reason is that we are all on a unique path. Because each person’s financial needs, access to retirement plans, tax implications, marital status, health, etc. will be different, this is not a one-size-fits-all solution.

However, researchers at online financial planning company United Income published a detailed report five years ago that looked at what age, if any, provides the greatest likelihood of maximizing your lifetime collection of Social Security benefits.

The report, “The Retirement Decision Hiding in Plain Sight,” looked at claims from 20,000 retired workers using data from the University of Michigan Health and Retirement Study to determine what age to claim would be most optimal, i.e. application would maximize lifetime collection of Social Security benefits.

Not surprisingly, given the unknowns I mentioned above, United Income found that only 4% of the 20,000 retirees studied made optimal claims. Unless we know the “expiration” date in advance, there will always be some educated guesswork involved in our decision on a claim.

However, a more important discovery was the inverse relationship between actual and optimal requirements. While 79% of retirees’ actual benefits began at ages 62, 63, and 64, only 8% of the total optimal claims occurred in this range.

At the other end of the spectrum, only a very small percentage of claimants began receiving benefits at age 70. However, United Income found that 57% of the 20,000 retired workers it studied would have maximized their lifetime Social Security benefits received at that age.

For the curious, the likelihood of maximizing your lifetime Social Security income when filing at age 66 was higher than at ages 62 to 65 (not in that order), but lower than at ages 67 to 70 (also not in in this order).

Once again, this does not mean that waiting is the smartest move for all future retirees. If you have a chronic illness that could shorten your life expectancy, or you are a spouse with a significantly lower income who wants to generate income for the family while your significant other’s wealth grows over time, filing early can make a lot of sense.

But the statistics certainly show that waiting has its financial benefits for most retirees.