If I have things my way, I won’t be retiring for a few more decades. So there’s really no pressure on me to decide right now when to claim Social Security.
But because writing about retirement planning is a big part of my work, I tend to find myself thinking about Social Security a lot. And as a result, I find myself contemplating a filing age often.
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Through the years, I’ve flip-flopped quite a bit on that decision. There was a time when I was convinced I’d claim Social Security at age 70 for the largest possible monthly payday. More recently, I’ve been thinking of signing up for benefits at age 62.
But based on my vision for Social Security in the context of my retirement finances, I’ve come to the realization that I may be wasting my time contemplating this decision. And I’m probably not the only person in that boat.
Weighing the pros and cons
On a basic level, seniors get an eight-year window to sign up for Social Security that begins at age 62 and ends at age 70. Granted, nobody is going to force you to take Social Security if you reach your 70th birthday having not submitted your claim. But since there’s no financial upside to waiting beyond 70, it’s typically considered the latest age to file.
I used to think I’d take benefits at 70 to boost my monthly payments for life. But when you delay your Social Security claim, you run the risk of ending up with less lifetime income from the program, depending on how long you remain on the planet.
I also like the idea of filing for Social Security at 62 to get that money earlier in life. A lot of people find themselves in better health at 62 than 70, so having those benefits eight years sooner could mean getting to spend them on meaningful and memorable experiences that aren’t guaranteed to be possible later on.
Of course, taking benefits at age 62 also means reducing them pretty substantially. But what good is more money later in life if it forces you to miss out on the things that you’ve always wanted to do?
I’ve also thought about claiming Social Security at age 67, which is my full retirement age. That way, there’s no reduction in my monthly benefits but also no boost.
Age 67 is sort of a middle-ground option. But even that age has pros and cons — you’re not getting your money as soon as possible, but you’re also not getting a boost.
Does it even make a difference?
I could go back and forth on the merits of claiming Social Security at different ages all day. But here’s why I’m starting to think it won’t make a difference — at least not for me.
First, Social Security is actually designed to pay you the same lifetime benefit regardless of when you sign up if you live an average lifespan. So for a lot of people, these calculations may not be necessary, because at the end of the day, the total amount of money they get from Social Security could end up being the same whether they sign up at 62, 64, 68, or 70.
But on my end, another reason I might stop putting thought into a Social Security filing age is that I hope my benefits will serve as supplemental income only. I’m working very hard to build up a solid nest egg, and I hope my savings will constitute the majority of retirement income.
If anything, my plan for Social Security is to use the money to pay for extra expenses but not essentials. And given that, I think it’s OK to take the pressure off myself and not worry so much about when I claim benefits.
If I file at 62, I’ll reduce my monthly benefit, but that also may not end up being a problem. And if I file later, it may not necessarily mean giving up experiences if I save enough to pay for them earlier out of my nest egg.
This isn’t to say that pre-retirees shouldn’t put a lot of thought into when they claim Social Security. Anyone who expects to need that money to pay for basic expenses must consider their choices carefully.
But if you’re someone who’s planning to use Social Security as extra money like I am, then the age at which you take benefits may not end up mattering all that much. So if it’s become a point of stress for you, you may want to decide that you’ll simply flip a coin and focus your energy on smart saving and investing decisions instead.
