1 reason I’ll be taking Social Security long before I’m 70

Retirement is an exciting chapter in life, but it requires a lot of planning. While there are countless decisions to make leading up to old age, one of the most critical is the age to claim Social Security.

You can start receiving benefits as early as age 62, but it comes at a high price in the form of a significant reduction in benefits. If you wait a few years to file, you’ll earn bigger checks, and delaying until age 70 will get you the biggest payout possible.

Many experts advise waiting until age 70 to deposit because it will increase your monthly income for the rest of your life. In some cases, this really is the best move. But there’s a good reason why I personally plan to take Social Security much earlier than age 70.

I want to enjoy retirement to the fullest

In theory, it might make the most sense to delay claiming Social Security. Depositing at age 70 will net you a bonus of at least 24% per month on top of your full benefit, and the average retiree collects $739 more per month at age 70 than at age 62. If your savings eventually run out, that extra cash can go. a long way.

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However, delaying benefits often involves gambling on your longevity. Many people will have to live into their 80s to “break even” — or collect more in total by deferring benefits than they would if they claimed early. While many people will live much longer than that, life can be unpredictable.

I currently have no reason to believe I won’t live to be 80 or more. But anything can happen between now and then, and health problems can appear very suddenly. If I file at age 70 and my health deteriorates shortly thereafter, I know I’ll regret not claiming benefits sooner.

Even without debilitating health problems, it’s often easier to live an active lifestyle earlier in life. While some people may continue to hike, travel or keep up with the grandchildren into their 70s or 80s, retiring at 60 can give you more time to fulfill your retirement dreams.

Also, backing up early comes with another serious advantage: you can change your mind. If you delay benefits and later wish you had claimed earlier, you’re out of luck. But if you file early, you can withdraw your claim within 12 months of your claim and then file again later. If you’re not sure when to claim, it can sometimes be smart to err on the side of caution and benefit sooner rather than later.

A good reason to delay benefits

Claiming early can give you more time to enjoy retirement, but smaller checks can be a serious disadvantage — especially for those with little or no savings. When it comes to the financial side of this decision, deferring until age 70 is hard to beat.

In fact, studies have shown that most retirees are better off financially if they take Social Security in their 70s. A 2022 report by the National Bureau of Economic Research, for example, found that retirement at age 70 is the optimal decision for 91.6 percent of U.S. adults. What’s more, the study found that people between the ages of 45 and 62 could see an average increase of $225,944 in lifetime income by claiming at their optimal age.

Whether you decide to benefit early or delay will depend on your retirement priorities. If your primary goal is to maximize your income, deferring benefits is probably the way to go. Waiting until age 70 can increase your payments by hundreds of dollars per month and increase your lifetime income by hundreds of thousands of dollars.

On the other hand, if your priority is to spend as much time as possible in retirement — even if it means making financial sacrifices — you can choose to file earlier. There is no right or wrong choice here, but by considering your goals and preferences, you can make the best decision for your retirement.