The age at which you start receiving Social Security benefits is a very important decision, as it will affect your monthly retirement income, so you have life left, but with a large number of options to make the application, it can be difficult to make the best decision about which is the most optimal age.
62 is the earliest age at which you can start receiving benefits, and it is also the time when most people start applying, about a quarter of men and women are Social Security beneficiaries at age 62, according to data provided by the Social Security Administration in 2022, while less than 10% of retirees expect to reach the age of 70.
While there is not necessarily a set age that is right or wrong to apply for benefits, there is a danger behind applying at age 62, as this is the average benefit at that age and the greatest risk of applying early.
How Much Does the Average Retiree Receive in Benefits?
The amount of your benefit will depend on different factors, including the length of your working life, your income history and the age at which you make the application for your benefits.
The Social Security Administration takes an average of your earnings from your highest earning 35 years of your career, processes it through a formula and adjusts for inflation, and the result is the amount you will receive at your full retirement age (FRA), which is at age 67 for everyone who was born in the year 1960 or later.
If you apply before the tax refund deadline, you will receive smaller payments per month. If you apply as early as possible, at age 62, your benefits will be permanently reduced by up to 30%.
This can mean a considerable reduction, which sometimes decreases their benefits by hundreds of dollars monthly, in fact, the average retiree receives only $1,298 per month at age 62, according to data generated in 2023 by the Social Security Administration, meanwhile, the average benefit at age 70 is about $2,038 monthly.
The Hidden Danger of Claiming Early Your Retirement Benefits
We mention again that there is not necessarily a single set age for everyone to apply for their benefits, but many older adults depend largely on Social Security during their retirement and, as the program is in a not very stable situation, smaller checks can make it much more complicated to retire comfortably.
More than 40% of baby boomers made the statement that Social Security will be their main source of income during their retirement, according to a report generated in 2023 by the Transamerica Center for Retirement Studies, even more worrisome is that 21% of adult U.S. citizens aged 50 and older do not have more income than retirement, according to a 2023 survey by the Nationwide Retirement Institute.
