Social Security claiming age
Also called full retirement age, FRA, delayed retirement credits
The age at which a person starts Social Security retirement benefits, anywhere from 62 to 70, which permanently sets the size of the monthly check.
What it means
Social Security retirement benefits can start as early as 62, but claiming before full retirement age permanently reduces the monthly amount. Full retirement age is 67 for people born in 1960 or later. For each year a person waits past full retirement age, delayed retirement credits raise the benefit by 8%, up to age 70, after which there is no further increase.
The choice is a tradeoff between more checks and bigger checks. Claiming early can make sense for people with health concerns, shorter life expectancy or no other income, while delaying tends to pay off for those who live into their 80s or beyond. For married couples, the higher earner’s claiming age also affects the survivor benefit the other spouse may receive. Claiming before full retirement age while still working can also temporarily withhold benefits under an earnings test.
Example
Suppose a worker with a full retirement age of 67 is entitled to $2,000 a month at 67. Claiming at 62 would cut that to about $1,400, a 30% reduction, while waiting until 70 would raise it to about $2,480. Ignoring inflation adjustments, the total collected by waiting until 70 overtakes claiming at 62 at about age 80.
How it’s used
- Planning when to retire
- Coordinating benefits between spouses
- Reducing longevity risk with a larger lifetime income
Strengths and weaknesses
Strengths
- Delaying raises an inflation-adjusted benefit that lasts for life
- Claiming early provides income sooner when it is needed
- Flexible timing anywhere between 62 and 70
Weaknesses
- Claiming early locks in a permanently smaller check
- Delaying may mean drawing down savings first
- Delaying pays less in total for those who die earlier
Related terms
Educational information only, not financial, tax or legal advice. Rules, limits and rates change; check the IRS, your lender or plan, or a qualified professional before acting.