Is It Better to Take Social Security at 66 or 70? Maximizing Your Retirement Benefits

Understanding the Impact of Delayed Retirement on Your Social Security Benefits

When planning for retirement, one of the key decisions you’ll face is determining the optimal time to start receiving Social Security benefits. While the earliest age at which most people can begin receiving these benefits is 62, doing so typically results in reduced payments. This is because individuals aren’t usually entitled to 100% of their benefits until they reach the full retirement age of 67. However, for those who are willing to wait, delaying retirement until age 70 can significantly increase their monthly benefit amount.

The Benefits of Delaying Retirement:

The Social Security Administration (SSA) offers a substantial incentive for delaying retirement beyond the full retirement age. For individuals born between 1943 and 1954, delaying benefits until age 70 results in a 32% increase compared to receiving benefits at age 66. This means that for every $1,000 you would have received at age 66, you would receive $1,320 at age 70. This increase can significantly impact your overall retirement income and financial security.

The Trade-Offs of Early Retirement:

While delaying retirement offers significant financial benefits, there are also some trade-offs to consider. By choosing to retire early, you may miss out on several years of potential earnings and contributions to your retirement savings. Additionally, you may have to rely more heavily on your savings and investments to cover your living expenses during those early retirement years.

Factors to Consider When Making Your Decision:

The decision of whether to take Social Security at 66 or 70 is a personal one that depends on various factors, including:

  • Your health and life expectancy: If you have a longer life expectancy, delaying benefits can be advantageous as you’ll receive higher payments for a more extended period.
  • Your financial situation: If you have significant savings and investments, you may be more comfortable delaying benefits and relying on those funds to cover your expenses during early retirement.
  • Your retirement goals: If you have specific retirement goals, such as traveling or pursuing hobbies, you may need to consider how early retirement would impact your ability to achieve those goals.

Calculating Your Potential Benefits:

The SSA provides online calculators that allow you to estimate your potential Social Security benefits based on your earnings history and retirement age. These calculators can be helpful tools in understanding the financial implications of your decision.

Consulting with a Financial Advisor:

For personalized guidance on maximizing your Social Security benefits, consider consulting with a financial advisor. They can help you analyze your individual circumstances and develop a retirement plan that aligns with your goals and financial situation.

The decision of whether to take Social Security at 66 or 70 is a complex one with no one-size-fits-all answer. By carefully considering the factors discussed above and utilizing available resources, you can make an informed decision that best suits your individual needs and retirement goals. Remember, delaying retirement can significantly increase your monthly benefit amount, but it’s crucial to weigh the potential trade-offs and make a decision that aligns with your overall financial plan.

You Might Pay Less in Taxes

Generally speaking, taxes are due on Social Security benefits. As per the website of the Social Security Administration (E2%80%99), you are required to pay taxes on your Social Security benefits, potentially up to 85% of them. This is applicable if you file a federal tax return as an individual and your combined income surpasses $34,000, or if you file a joint return and you and your spouse have combined income exceeding $44,000.

According to Aviva Pinto, managing director of Wealthspire Advisors in New York City, “you will have to pay less in taxes on your Social Security benefits” if you postpone accepting your benefits and are retired by the age of 70.

If you choose to postpone retiring, remember to enroll in Medicare by the time you turn 65.

The chart below explains how delayed retirement affects your benefit. Your date of birth and the number of months you postpone the start of your retirement benefits determine how much more you will receive. If you start receiving retirement benefits at age:

All of your monthly benefit is yours if you begin receiving benefits at age 66. Your monthly benefit will increase if you wait to start receiving retirement benefits until after reaching full retirement age.

Even if you keep delaying receiving benefits, your monthly benefit stops growing when you turn 70.

What’s the Best Age to Claim Social Security 62, 66, or 70?


Why is it better to take Social Security at age 66 instead of 70?

If you start receiving benefits at age 66 you get 100 percent of your monthly benefit. If you delay receiving retirement benefits until after your full retirement age, your monthly benefit continues to increase. The chart below explains how delayed retirement affects your benefit.

What is the best age to start collecting Social Security?

You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.

Why is it best to wait until you are 70 to take out Social Security benefits?

If you wait until age 70 to start your benefits, your benefit amount will be higher because you will receive delayed retirement credits for each month you delay filing for benefits. There is no additional benefit increase after you reach age 70, even if you continue to delay starting benefits.

What is the average Social Security check at age 66?

Social Security offers a monthly benefit check to many kinds of recipients. As of December 2023, the average check is $1,767.03, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient. In fact, retirees typically make more than the overall average.

Is 67 a good age to claim social security?

Though age 67 was the second most successful claiming age behind age 70, it would have been the correct choice for only around 10% of the retired workers studied. Admittedly, not every retired worker can wait until age 70 to begin receiving their Social Security benefit.

How much social security do you get at age 66?

At age 62: $2,364. At age 65: $2,993. At age 66: $3,240. At age 70: $4,194. What is the maximum Social Security benefit at age 66 in 2021? $2,364 for someone who files at 62. $3,345 for someone who files at full retirement age (66 and 2 months for people born in 1955, 66 and 4 months for people born in 1956). $4,194 for someone who files at age 70.

What is the gap between 62 and 70 Social Security benefits?

If the October 2023 average retired-worker monthly benefit of $1,843.96 were to serve as the baseline, the gap between an age 62 and age 70 claim is nearly $1,000 per month. However, claiming Social Security benefits isn’t a cut-and-dried process. Every age from 62 through 70 has its positives and negatives.

Can I get Social Security if I’m 66?

Depending on your birth year, you’d receive either your full benefit or endure a relatively small permanent monthly reduction to your payout. The potential downside to an age 66 claim is that if you live well past age 80, you’ll have, ultimately, left Social Security dollars on the table.

Leave a Comment