Social Security 62 vs 67 vs 70

Navigating the world of Social Security can be challenging, especially when deciding the optimal age to start drawing benefits. Should you start early at 62, wait until the Full Retirement Age (FRA) of 67, or delay even further until 70? In this comprehensive guide, we’ll examine the pros and cons of starting benefits at each age, enabling you to make an informed decision for your retirement future.

Table of Contents

Understanding Your Full Retirement Age (FRA)

Before diving into the comparison, it’s essential to grasp the concept of FRA:

What is FRA? The age at which you’re eligible to receive your full Social Security benefits.
Why 67? For those born in 1960 and later, the FRA is 67. However, for those born before 1960, the FRA might be slightly earlier.

Starting at Age 62: The Early Bird’s Perspective

Benefits: The primary advantage is that you start receiving funds earlier, which may be essential for those with immediate financial needs or health concerns.
Drawbacks: Starting at 62 results in a reduced monthly benefit. For someone with an FRA of 67, the reduction is about 30%.

Holding Out for 67: The Balanced Approach

Benefits: By waiting until 67, you’ll receive 100% of your Social Security benefits. It strikes a balance between receiving funds and maximizing the monthly amount.
Drawbacks: While you’ll get a more significant monthly sum than at 62, you might miss out on the increased benefits that come with waiting until 70.

Delaying Until 70: The Long Game

Benefits: Every year you delay past your FRA, your benefits grow, maximizing at age 70. For someone with an FRA of 67, waiting until 70 can result in a 24% increase in monthly benefits compared to starting at FRA.
Drawbacks: The primary risk is not living long enough to capitalize on the increased monthly benefits. It requires weighing immediate needs against potential future gains.

Factors to Guide Your Decision

Life Expectancy and Health: Consider your current health and family history. If longevity runs in your family, waiting might be beneficial.
Financial Situation: Do you need the money at 62, or can you afford to wait and receive a more substantial sum later?
Employment Status: If you’re still earning, it might impact the benefits you receive if you start collecting before your FRA.

In Conclusion

Deciding when to start collecting Social Security — at age 62, 67, or 70 — requires careful thought and a clear understanding of your individual circumstances. Each choice comes with its set of benefits and drawbacks. Engage with financial professionals, and utilize tools available on the Social Security Administration’s website to make the decision that best aligns with your retirement goals.