Although you may be able to start receiving Social Security at age 62, most people find that waiting until they are 70 results in better rewards. A lot depends on your situation when it comes to taking Social Security.
While there is no "perfect" claiming age for everyone, deferring Social Security benefits can be favorable over a prolonged retirement.
Your full retirement age depends on your birth year
The year of your birth determines your full retirement age (FRA). Generally, you can claim your Social Security benefits or PIA when you reach full retirement age.
The primary insurance amount (PIA) is the sum you will be receiving once you retire and it’s based on your career-long average earnings, adjusted for inflation. The age you become eligible for full retirement depends on your birth year. For people born in 1954, it is 66, and for those born in 1960 or later, it is 67. So, you have already reached your FRA if you were born before 1955.
The full retirement age also determines when you can claim Social Security without reducing your benefits and the number of delayed retirement credits you can earn to increase your benefits. It also determines how much you can earn while still receiving Social Security without having your benefits reduced.
The retirement age calculator
The most important parts of the equation, when calculating your retirement age, are the year and month of your birth. Once you know your full retirement age, you also know when you will become eligible for Social Security retirement benefits without any penalties.
With the help of this calculator or our retirement age chart, you may determine your full retirement age. It’s important to know that if you were born on January 1st you should consider the preceding year as the one relevant to calculating your FRA.
Social Security Full Retirement Age Chart
Year of birth
Full retirement age
66 + 2 months
66 + 4 months
66 + 6 months
66 + 8 months
66 + 10 months
1960 and after
Full retirement age and its effect on your Social Security
The only way to get the full Social Security benefit amount is to reach the full retirement age and then apply for the benefits. If you are in a situation where you need to rely on Social Security benefits before you’ve actually reached your FRA here is how this will impact your benefits:
The first three years will see a 6.7% decrease per year, and the remaining four years will see a 5% decrease. A person who applies for benefits at age 62 with an FRA of 67 will see their benefits reduced by 30.1% which is just a few percentile points shy of a third of the entire amount.
When you apply for benefits after FRA, you get delayed retirement credits worth 2/3 of 1% monthly. Your monthly benefit increases by 8% annually as a result. Until the age of 70, one can accrue delayed retirement credits, but after that point, there is no financial advantage in delaying one's claim. If you are getting spousal or survivor benefits, you are not eligible for delayed retirement credits.
The Bottom Line
You should consider taking advantage of your retirement benefits as late as possible, provided you have financial resilience and you are in sound health. Of course, this only goes for situations where you are not older than 70, which is when added benefits stop applying.
The key risks for any retiree are a long retirement, market volatility, and inflation. Delaying benefits gives you more financial cushion to withstand unforeseen situations. In any case, there is much to consider, and your scenario may be unique. If you require assistance, don’t hesitate to seek help from an expert financial planner.