You already know that claiming retirement at the age of 62 has some drawbacks. The sooner you claim your retirement, the smaller your monthly Social Security check will be. So, claiming your retirement check at age 62 means that your monthly benefit will be permanently reduced: in some cases, that reduction could be as much as 30% compared to if you wait until full retirement age (FRA), which is between 67 and 69 for most people born after 1960.
And you already know that any extra doubts during retirement can mean a major change, since living costs increase after old age. On the other hand, waiting to retire until the age of 70 has its own advantages. For example, Social Security benefits will increase each year you delay retirement after your FRA. This is because the Social Security administration (SSA) makes an annual adjustment on the individual’s benefits.
Defining the age at which you are going to retire depends entirely on you and your partner, whether you are a person about to retire, married or living as a couple. They have to weigh up how much money they need to cover their retirement expenses, how healthy they expect to be in the retirement years, and whether they have options to keep working beyond the FRA.
On the other hand, if you want to claim their retirement much earlier, they have to consider how much you and your partner are comfortable with the possibility of receiving reduced Social Security benefits.
Claiming Social Security at Different Ages: What Is the Impact on My Check?
For the majority of now-retired workers in the United States, Social Security income represents a fundamental income. According to a Gallup survey conducted for 22 consecutive years, between 80 and 90% of retirees depend to a greater or lesser extent on their monthly social security check, and the projections for the future are similar. It is expected that in the coming years, between 76 and 88% of retirees will need this benefit to cover at least a significant part of their expenses.
The importance of Social Security is reinforced by its impact on reducing poverty among older adults in the United States. According to a study by the Center on Budget and Policy Priorities, thanks to Social Security payments, the poverty rate among people aged 65 and over has decreased from 38.7%, prior to the existence of the program, to 10.2% by 2022.
The Four Fundamentals on Your Benefits Calculation
There are four important elements that define how much you will receive monthly during the retirement years. The first is the work history, since the Social Security administration takes its best 35 years of work income, and the contributions in social security taxes must be reported each and every one of them properly to the SSA.
It happens that for every unreported year or for every unreported month, the SSA is going to compute $0. You will understand that a month or a year computed at zero is going to push down your monthly retirement to receive. In fact, there is the second point that is the history of earnings and contributions you have made to your retirement fund.
Then there is the full retirement age, or FRA, which we discussed earlier. That is, the age at which you are eligible to collect 100% of your monthly computable benefits. Your ARF is determined by your year of birth and is the only one of the four elements that you cannot control.
The fourth component that determines how much you will collect during your retirement is the age at which you decide to claim your payments. For this last point of the four defining ones, it is necessary to delve more in detail.
How Much Will I Receive From Social Security if I Retire Today?
As we said, your FRA is determined by the year of birth, and how much you will charge is a direct consequence of that mathematical function. For example, if you were born between 1943 and 1954 and retire at age 62, you will receive 75% of your monthly benefit, but if you retire at age 66, you will receive 100%. Now, a person of those same birth years who retires at the age of 72 can claim up to 132% of what they are entitled to.
In that example, we see someone retiring at 62 and someone retiring at 70, and in between there are a whole series of variable years and percentages that affect the size of the retirement check.
Take a look at the next chart: find your year of birth, then the age you want to retire at, and you’ll find how much of your benefit will you be able to claim.
| Year of Birth | 62 Years | 63 Years | 64 Years | 65 Years | 66 Years | 67 Years | 68 Years | 69 Years | 70 Years |
|---|---|---|---|---|---|---|---|---|---|
| 1943-1954 | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% | 132% |
| 1955 | 74.2% | 79.2% | 85.6% | 92.2% | 98.9% | 106.7% | 114.7% | 122.7% | 130.7% |
| 1956 | 73.3% | 78.3% | 84.4% | 91.1% | 97.8% | 105.3% | 113.3% | 121.3% | 129.3% |
| 1957 | 72.5% | 77.5% | 83.3% | 90% | 96.7% | 104% | 112% | 120% | 128% |
| 1958 | 71.7% | 76.7% | 82.2% | 88.9% | 95.6% | 102.7% | 110.7% | 118.7% | 126.7% |
| 1959 | 70.8% | 75.8% | 81.1% | 87.8% | 94.4% | 101.3% | 109.3% | 117.3% | 125.3% |
| 1960 or later | 70% | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | – |