Only 4% of retirees claim Social Security at the most financially optimal time. That decision could cost you thousands.

Potentially One of Your Biggest Decisions in Retirement?

When to claim Social Security.

When you claim social security may be one of the most impactful financial choices you’ll make in retirement.

And according to research, nearly everyone may get it wrong. A study found that 96% of retirees don’t claim benefits at the most financially optimal time. That means they may leave thousands of dollars on the table, sometimes over $100,000 per household.

Let’s explore what makes this decision so complex, and how you may get it right.

The Timing Trade-Off: Now or Later?

You may start Social Security as early as age 62.

But the longer you wait, the more you may receive each month.

• Claim at 62? You may receive a reduced benefit.
• Wait until full retirement age (66–67)? You may receive your full benefit.
• Delay until age 70? You may receive up to 8% more for every year you wait after full retirement age.

The difference may add up. Waiting until 70 may increase your monthly benefit by as much as 77% compared to claiming social security at 62. That may mean tens or even hundreds of thousands of dollars over your lifetime.

Why Do So Many Claim Too Early?

Many retirees may file for Social Security early because:

• They may be concerned the program may run out of money
• They may want to stop working as soon as possible
• They may need the income to cover current expenses
• They simply don’t realize how much more they could potentially receive by waiting

And Social Security may not always make it easy. With more than 2,700 rules, the system is complex.

It may be easy to misunderstand your options, and harder still to see how those options could impact your entire retirement picture.

Couples: Timing May Be Even More Critical

If you’re married, the timing of each spouse’s claim may affect both incomes.

If one spouse earned more over their career, you may consider:

• Having the lower earner claim first, possibly as early as age 62
• Letting the higher earner delay until age 70 to maximize lifetime benefits

This approach may also improve survivor benefits for the spouse who lives longer. Even couples with similar earnings histories may benefit from waiting together, if they have the savings and the proper planning to support it.

Other Scenarios That May Affect Your Benefits

There may be additional options for:

• Survivors: Widows and widowers may claim survivor benefits as early as age 60 (or age 50 if disabled). But waiting until full retirement age may allow them to receive the full survivor benefit.
• Divorcees: If you were married for 10+ years and are now single, you may be eligible to receive benefits based on your ex-spouse’s work history.
• Public Employees: New changes to the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) may affect your benefit if you receive a public pension.
• Workers: If you’re still working while claiming social security, your benefits may be reduced until full retirement age due to the earnings test, and those benefits may be recalculated later.

There May Not Be One “Perfect Age”—But There May Be a Right Strategy

The best time to claim Social Security may depend on:

• Your current health
• Your life expectancy
• Whether you’re married, divorced, or single
• Your other income sources
• How long you plan to work
• Cash flow needs

Some retirees may need to claim early to cover expenses. Others may benefit more by waiting.

What matters most is that your decision may fit into your broader retirement income plan.

What If Your Social Security Strategies Were Part of a Bigger Plan?

Imagine knowing:

• What your optimal claiming age is based on your income and lifestyle needs
• How to coordinate spousal and survivor benefits
• What to draw from first: investments, savings, or Social Security
• How to reduce taxes on your benefits over time

Social Security may only be one piece of your retirement income plan, but it may be one of the most important.

Let’s make sure you strive to maximize your Social Security benefits in the context of your overall financial plan so you can potentially prevent leaving money on the table.

Reach out to learn how a customized retirement plan may help you optimize your benefits and support the retirement you want to live.