What’s the best age to start receiving retirement benefits?

Submitted by Briana Snyder, AOA Options Counselor

The answer is that there’s not a single “best” age for everyone and, ultimately, it’s your choice. The most important thing is to make an informed decision. Base your decision about when to apply for benefits on your individual and family circumstances.

What you should know before you apply

□ What does “retirement” mean?

Retiring means getting your Social Security retirement benefit. It might mean that you’ve also stopped working. However, these two things don’t need to happen at the same time. For example, you have the option of delaying your monthly benefit even after you stop working. Delaying your benefit will increase your monthly benefit amount. (See below.)

□ Your benefits are based on your entire earnings history

Do you know how your benefit is calculated? Your monthly benefit amount is based on your highest 35 years of earnings. If you don’t have 35 years of earnings, your monthly benefit will be reduced, because years with no earnings will count as zeros.

□ Your monthly benefit is higher if you wait to start

When should you start your retirement benefit? You can start receiving benefits as early as age 62. However, the longer you wait (up to age 70), the higher your monthly benefit will be — for the rest of your life. If you’re married and you’re the higher earner, delaying your benefit may also mean higher survivor benefits for your spouse when you pass away.

□ Your full retirement age may be higher than you think

Your “full retirement age” is determined by the year you were born. The retirement age used to be 65 for everyone, but is gradually increasing to 67. As the full retirement age goes up, benefits claimed at earlier ages go down.

□ Your benefits may be temporarily reduced if you work while receiving benefits

Working after you start receiving retirement benefits may affect your monthly benefit amount, depending on your age and how much you earn. If you are younger than your full retirement age, and your earnings exceed certain dollar amounts, some of your monthly benefit may be withheld. Social Security will increase your monthly benefit after you reach full retirement age to account for the months of withheld benefits. When you reach your full retirement age, you can work and earn as much as you want and your benefit will not be affected.

□ Your benefits may be taxed

Some people have to pay federal income taxes on part of their Social Security benefits. This usually happens only if you have other substantial income (e.g. wages, interest, or dividends) in addition to your benefits.

Additional things you should think about

□ Your longevity and health

Retirement may be longer than you think. As you consider when to begin receiving retirement benefits, take into account how long you might live. Today, more than one in three 65-year-olds will live to age 90. Social Security benefits last as long as you live, providing valuable protection against outliving savings and other sources of retirement income. Delaying your benefit to let it grow is one way to increase your monthly Social Security protection.

□ Retroactive benefits

If you are past your full retirement age when you apply for benefits, you can choose to receive up to six months of retroactive monthly benefits. However, using this option changes the start of your benefit to an earlier date. Remember that by choosing to start your benefit earlier, your monthly benefit amount will be lower for the rest of your life. Your spouse’s survivor benefits may also be lower.

□ Signing up for Medicare

Consider whether you need to apply for Medicare at age 65, even if you aren’t applying for monthly retirement benefits. If you have already started receiving your retirement benefits, you will be automatically enrolled in Medicare when you turn 65. Medicare Part A (Hospital Insurance) is free for most people, and Medicare Part B (Medical Insurance) requires a monthly premium. Generally, if you have not already started receiving retirement benefits, you will want to sign up for Medicare three months before turning age 65. This is unless you have group health coverage through a current employer.

NOTE: If you don’t have group health coverage through a current employer and you don’t sign up for Medicare Part B when first eligible, then you may have to pay a late enrollment penalty for as long as you have Part B. Also, you may have to wait to enroll, which will delay this coverage.

Applying for your benefits

Once you have decided when you want to start receiving your monthly Social Security benefit, you can apply up to four months before the date you want your benefits to start.

Contacting Social Security

The most convenient way to do business with Social Security is to visit www.ssa.gov to get information and use the online services. There are several things you can do online: apply for benefits; get useful information; find publications; and get answers to frequently asked questions.

Or, you can call Social Security toll-free at 1-800-772-1213 or at 1-800-325-0778 (TTY) if you’re deaf or hard of hearing. Social Security can answer your call from 8 a.m. to 7 p.m., weekdays. You can also use the automated services via telephone, 24 hours a day, so you do not need to speak with a representative. Wait times to speak to a representative are typically shorter Wednesdays through Fridays or later in the day.

Information modified from the Social Security Administration Publication No. 05-10377. January 2022. “Your Retirement Checklist”