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What is Your Optimal Age to Claim Social Security Benefits

What is Your Optimal Age to Claim Social Security Benefits

October 06, 2023

As you plan for retirement, one of the most important questions you will need to answer is deciding at what age you will begin claiming Social Security benefits.  While you may be anxious to claim as soon as possible, determining the optimal time to begin claiming to maximize your overall benefits is a complex calculation that should always be handled by a financial advisor.

A recent study has shown that fewer than 10% of Americans begin claiming Social Security at the optimal age.  Those who begin claiming at the wrong time could cost themselves and their families a lot of money in the long run, in excess of $100,000 in some cases.

Approximately one-third of Americans begin claiming Social Security benefits at age 62, which is the earliest you can start.  However, age 62 is not considered Full Retirement Age (FRA).  FRA varies depending on the year you were born (currently 66 ½ and increasing gradually to67 for those born in 1960 or later).

In 2023, the maximum Social Security benefit for those who begin claiming at Full Retirement Age is $3,627 per month, called your Primary Insurance Amount (PIA).  However, those who begin claiming at age 62 could face up to a 30% reduction in their monthly benefits, bringing this down to $2,572 per month.  The age that you begin claiming benefits will lock in what percentage of your PIA you receive each month for the rest of your life, so if you start claiming benefits too early, this could result in much less benefits received overall if you live beyond the average life expectancy.

The longer you wait after age 62 to claim benefits, the higher your percentage of PIA will be. You can even receive more than 100% of your PIA if you continue to wait beyond your Full Retirement Age.  You can wait to begin claiming benefits up until age 70, when you could receive up to a maximum of $4,555 per month in 2023.  While this is an excellent strategy for many people who can afford to wait, only 8% take advantage of waiting until age 70.  If you are in excellent health and have longevity in your family, then waiting could result in significantly more benefits throughout your lifetime.

Waiting longer to receive benefits may also be a tax-smart strategy.  Since anyone with an AGI of above $34,000 if single or $44,000 if married is taxed on 85% of their Social Security benefits, you could lose a lot in taxes if you’re still above this tax bracket and claiming benefits.  If you’re still working and have additional income, you may want to consider holding off until you fully retire to begin benefits in order to keep your taxes at a minimum and at the same time increase future benefits.

Your Medicare premiums also go up depending on your income, so adding the additional income of Social Security before it is necessary could really increase your healthcare costs between your 65th and 70th birthday.

There are dozens of options to choose your best Social Security benefit strategy, and the best path for you depends on the details of your individual circumstances. 

If you are close to or within your Social Security retirement age and would like our assistance in making the best choices, please reach out to my financial service associate Melissa at  She will schedule a retirement planning meeting for you to speak with one of our retirement planning specialists and will also gather the necessary information so you can make an informed decision.  We will do our best to help guide you in maximizing your retirement income throughout your lifetime.

John J. Vento, CPA, MBA, CFP®

President & CEO

Financial Advisor