Social Security can be claimed any time between ages 62 and 70, yet there are benefits to waiting to claim it. People who do not claim Social Security until age 70 receive 24% higher benefits than those who claimed at their full retirement age (66 or 67), and 76% higher benefits than those who claimed at 62. Still, it can be difficult to “nudge” people to wait. Yet in a study intended to find out how people can be persuaded to wait to claim Social Security benefits, participants who were asked to list the good things about waiting or the bad things about not waiting ended up listing an intended claiming age 10 months later than the control group. Likewise, participants asked to imagine the long-term consequences of claiming earlier listed an intended claiming age 6 months later than the control group. This type of long-term thinking seems to be a key to convincing people to wait later to claim their benefits.
- The benefit of taking Social Security too early cuts 25 to 30 percent off of your payments. Holding out can increase your retirement up to 76% if you wait until the maximum age.
- One member of the household, usually the higher earner should wait until age 70 but many do not.
- If you wait until age 70 to collect Social Security than you are basically shoring up more funds based on the fact you could live a longer life span than what you had originally thought.
“The obstacle course that is retirement planning ends with a doozy of a challenge: how to convert years of saving into a reliable stream of income that can last for 25 or more years.”