One of the most critical decisions you’ll ever make when planning for retirement is determining the right time to claim Social Security. While most retirees can start claiming their monthly benefit at age 62, waiting to claim can result in a significantly larger monthly check from the government. In fact, your benefits typically reach their maximum at age 70.
This leaves retirees with plenty of options. Many financial decisions often benefit from following the wisdom of the crowd. By aggregating the decisions and estimates of millions, you might gain a better guide to what you should do compared to relying on a single person’s advice. However, if you follow the average retiree’s claiming strategy, you may end up worse off over the long run.
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Here’s the average age retirees claim Social Security
The average age at which retirees claim Social Security has steadily increased since the start of the 21st century. To make an informed decision, consider the following:
- Understand your financial needs and how they may change over time.
- Evaluate your health and life expectancy.
- Consider whether you can afford to delay your claim to maximize your benefits.
- Take into account any other sources of retirement income you may have.
By carefully weighing these factors and making a strategic decision about when to claim Social Security, you can potentially enhance your retirement benefits and secure a more comfortable future.
Legislative Changes Affecting Retirement Age
In 1983, Congress passed new legislation that altered the full retirement age from 65 to 67 in two stages. The first stage took place in the early 2000s, affecting workers born in 1937 or later. These individuals saw their full retirement age gradually increase to 66.
The second stage is currently being implemented, impacting workers born in 1955 or later. These workers are experiencing a gradual rise in their retirement age, ultimately reaching 67. This transition is expected to be completed by 2027.
Impact on Claiming Social Security Benefits
The full retirement age is crucial because it determines when individuals become eligible for their standard benefit, also known as the primary insurance amount. This change has led to a noticeable shift in the average age at which people claim their benefits.
From 2004 to 2014, the country saw a significant increase in the average claiming age. In 2004, the average retiree claimed benefits at the age of 63 years and 4 months. A decade later, this average had risen by about one year. As Americans continue to adjust to the new full retirement age of 67, it’s likely we’ll observe another upward trend in the claiming age.
This shift underscores the importance of understanding the evolving landscape of Social Security and planning accordingly for a secure retirement.
Today, the average retiree claims benefits at age 65, according to the most recent data provided by the Social Security Administration about new retirement benefits awarded in 2022.
Popular Ages for Claiming Retirement Benefits
The two most popular claiming ages are 62 (the first year of eligibility) and 66. Interestingly, less than 10% of retirees wait until age 70 to maximize their monthly benefits.
Average Benefit Amounts for New Claimants
In 2022, the average retirement benefit for new claimants (excluding conversions from disability) was $1,938.75. This translates into a 2024 benefit of $2,174.86, thanks to the cost-of-living adjustments (COLAs) for 2023 and 2024.
However, it’s important to note that the average benefit for those who claimed at age 65 was less than the overall average. Specifically, the average 65-year-old claiming benefits in 2022 received just $1,874.56 per month. There are a couple of reasons for this discrepancy.
- Many individuals may have had lower lifetime earnings, which affects their benefit calculation.
- Some may have opted to claim benefits earlier due to personal circumstances, thereby reducing the amount received.
Understanding these figures can help you make a more informed decision about when to claim your retirement benefits, ensuring you maximize your financial security during your golden years.
When it comes to maximizing your Social Security benefits, timing is everything. Understanding the nuances of when to claim can significantly impact the size of your monthly check. Here’s a breakdown to help you make an informed decision.