Key Considerations for Seniors When Claiming Social Security Benefits

Deciding when to start taking Social Security benefits is a significant choice for seniors. Most people become eligible at 62, making it the most common age to file. While this option suits many, individual circumstances dictate the best timing for claiming benefits.

1. Eligibility for Survivor Benefits at Age 60

Survivor benefits can be claimed as early as age 60 for widows and widowers. You may qualify based on a deceased spouse’s earnings. Furthermore, if you were divorced after being married for at least 10 years and remain unmarried until age 60, you might also be eligible.

The value of survivor benefits can reach what your late spouse collected before passing. If they hadn’t claimed benefits, you could receive the amount they would have been entitled to at their full retirement age. However, collecting early reduces monthly checks.

Widows and widowers have the option to claim either survivor benefits or their own retirement benefits. For many, the strategy is to claim survivor benefits at 60 and switch to personal retirement benefits around age 70, when they max out. Alternatively, claiming personal benefits at 62 and waiting for survivor benefits may also be prudent.

2. Claiming at Age 62

Many seniors may benefit from claiming benefits starting at age 62, particularly lower-earning spouses. This strategy often maximizes the household’s lifetime income from Social Security.

When the lower-earning spouse claims benefits at this age, they may benefit from spousal and potentially survivor benefits as well. However, if you expect a longer lifespan than average, delaying the claim might be more beneficial, given that Social Security serves as insurance against outliving your savings.

3. Full Retirement Age (66-67)

Your full retirement age is the point at which you can claim the maximum spousal or survivor benefit. Claiming at this age makes sense for those who expect to live long lives or wish to protect their finances.

The full retirement age varies from 66 to 67, based on birth year. Those born before 1954 reach it at 66, while individuals born in 1960 or later must wait until 67. Lower-earning spouses should decide whether to claim benefits at full retirement age for spousal benefits or wait until personal benefits max out at age 70. Online calculators can assist in this decision-making process.

4. The Advantages of Waiting until Age 70

Your personal Social Security benefit reaches its maximum at age 70. Each month you delay collecting benefits after your full retirement age increases your monthly payments by two-thirds of a percentage point. For a full retirement age of 67, this results in a significant 24% increase by waiting three more years.

Statistically, waiting until age 70 maximizes lifetime income for those with average life expectancies. This approach is particularly advantageous for individuals without a spouse. High-earning spouses may find delaying beneficial since their survivor benefits can continue beyond their own death, enhancing total long-term value.

While age 70 is often promoted as the ideal time to claim benefits, individual situations differ. It is essential to weigh the advantages of claiming benefits at any of these ages based on personal financial circumstances.

The Overlooked Social Security Bonus

Many Americans fall behind on retirement savings, but several lesser-known Social Security strategies can enhance retirement income.

For instance, a simple adjustment in claiming strategies could potentially yield up to $22,924 annually. Maximizing Social Security benefits can significantly affect retirement security.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.