Key Considerations for When to Claim Social Security Benefits

Deciding when to claim Social Security is one of the most significant financial choices you will face as you approach retirement. While your monthly benefit is calculated based on your wage history, your age at the time of filing influences the amount you receive each month.

You can begin claiming Social Security once you turn 62. For those born in 1960 or later, the full retirement age is 67, which is when you can access your entire benefit without any reduction.

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You also have the option to delay claiming Social Security past your full retirement age. For each year you wait until age 70, your benefits increase by 8% annually.

While it may seem beneficial to maximize your Social Security check by waiting until 70, there are several factors to reconsider.

1. Job Satisfaction Might Be Deteriorating

For many, the decision to wait until 70 to claim benefits hinges on maintaining employment until that age. However, if your job has become unbearable and is affecting your mental and physical well-being, it might be prudent to retire sooner. Opting for an earlier claim could mean accepting a smaller benefit, but it may also offer much-needed relief.

When you’ve dedicated your life to your work, pushing through to full retirement age becomes a tougher decision if your job is contributing to your unhappiness. If a recent change in management has left you feeling unhappy or your duties have shifted towards undesirable tasks, it may be time to consider stepping back from the workforce.

2. Health Concerns Are a Factor

Your health can change unexpectedly, and a decline might prompt a reevaluation of your decision to wait until 70 to claim Social Security. Delaying benefits could ultimately result in less lifetime income if health issues arise and limit your lifespan.

Generally, it’s wise to delay claiming if you expect to live long enough to benefit from it. Yet, if health issues raise concerns about your longevity, opting for earlier benefits could be a more financially sound choice. Passing away a few years after delaying your Social Security could lead to receiving less than you would have gained by filing earlier.

3. Retirement Savings May Be Sufficient

For those who rely heavily on Social Security for retirement income, waiting to claim benefits at 70 might seem prudent. However, a closer look at your retirement savings could reveal that you have more than enough to live comfortably.

For instance, if your savings have grown to $2 million, the need for a larger monthly Social Security benefit diminishes. In such circumstances, you might consider claiming Social Security at full retirement age or even earlier, allowing you to use those funds for travel or personal goals while you’re still in good health.

Claiming benefits at 70 is a valid choice for many, and the financial benefits can be substantial. However, if any of the above considerations resonate with you, it may be wise to rethink that decision.

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