By Rusty Gloor, National Social Security Advisor at the AMAC Foundation, the non-profit arm of the Association of Mature American Citizens
Dear Rusty: I turn 62 next year, and I am getting different answers to my questions so I hope you can help me. The amount I would collect is different at 67 and 72. If I start to collect Social Security at 62, when I turn 67 will it go up to that amount? And go up again when I turn 72? One person I spoke to said yes it does. The next person I spoke to said no – you get the amount for the age that you start to collect and that’s all you get for the rest of your life. Please help me to understand if I should start to collect at 62 or should I wait? Signed: Confused About When to Claim
Dear Confused: First of all, your Social Security benefit stops growing when you turn 70, so waiting beyond that to claim will only cause you to lose benefits you are entitled to. Essentially you have an 8 year window to claim your Social Security benefits, and the amount you get will be based on the age you claim, relative to your full retirement age (FRA). Your personal FRA is 67, and if you claim at age 62, you’ll get 70% of what you would get at your FRA. That reduction is permanent except for Cost of Living Adjustments (COLA) which may occur annually. Whenever you claim, that is the amount you’ll get for the rest of your life – it doesn’t go up at age 67, or any other later age. But the question of whether you should claim at age 62 or wait longer is more complicated.
If you are still working, you should be aware that claiming at any time before age 67 will mean Social Security’s “earning test” will apply. The earnings test sets a limit for how much you can earn from working before SS takes away some of your benefits. For 2021, the earnings limit is $18,960 (it changes annually) and if that is exceeded SS will take away benefits equal to $1 for every $2 you are over the limit (we don’t yet know what the 2022 limit will be, but it will be slightly more than the 2021 limit). The earnings limit applies until you reach your full retirement age, after which there is no longer a limit to how much you can earn. If you exceed the earnings limit by a substantial amount, you could even be disqualified from receiving any benefits.
Other factors to consider when deciding when to claim are your health and your life expectancy, the urgency of your need for the money, and your marital status. The longer you wait to claim, up to age 70, the more your benefit will be. In fact, if you wait until age 70 to claim, your benefit will be 24% more than it would be at your FRA. But whether to wait beyond your FRA to claim should consider your life expectancy. If, for example, you wait until age 70 to maximize your benefit, you will need to live until at least 83 to break even (average longevity for someone your current age is about 84).
If you are married and have higher lifetime earnings than your spouse, you should be aware that your spouse’s benefit as your survivor, should you die first, will be affected by your age when you claim. If you wait and claim at a later age, your spouse’s survivor benefit will be more (assuming your spouse’s own benefit is smaller). If you claim at an earlier age, your spouse’s survivor benefit will be less.
So, as you can see, there’s no one simple answer for when you should claim your Social Security benefits. Everyone’s personal circumstances are different and deciding when to claim benefits should consider your entire situation, as described above.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website amacfoundation.org/programs/social-security-advisory or email us at ssadvisor@amacfoundation.org.
