For most people, the optimal age to claim Social Security is 70. A study from United Income found that the majority of retirees would end up with more lifetime income if they delayed their benefits until that age.
This does not mean that everyone is better off claiming at 70, though. In fact, there are three situations in which making a different choice would be a better financial move.
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If you're claiming spousal benefits
When you are claiming benefits based on your spouse's work record, you absolutely do not want to wait until you are 70 to do so. The best age to start your checks in this situation is typically your full retirement age (FRA) . That's because if you claim your benefits at your FRA, you should receive the maximum spousal benefit, which is 50% of your higher-earning spouse's primary insurance amount.
You cannot earn delayed retirement credits for spousal benefits, so there's no benefit to waiting any longer than FRA to claim them. The most you'll get is always going to be 50% of your spouse's standard benefit check. You do, however, lose benefits if you claim before FRA, so waiting until then often makes good sense.
If you're in poor health with no spouse
Claiming benefits at 70 is also a bad idea if you're in poor health and you won't have a spouse relying on survivor benefits. That's because you're unlikely to break even for your delayed claim in this situation.
When you delay starting your Social Security benefits, benefits increase -- but you miss out on the money that you'd be getting each month if you had started payments earlier. You have to live for long enough so higher future benefits make up for the missed money. Often, this takes over a decade to do depending on how long you delay. You typically have to outlive your projected life expectancy in order to end up with more lifetime income due to a delayed claim.
If you aren't in good health, odds are that you'll end up with less than if you'd claimed early. In fact, if you pass away before 70, you might end up without a single dollar of benefits.
Now, if you were married and you earned more than your spouse, then delaying your claim would still make sense even if you're in poor health. Doing so would increase your spouse's survivor benefits, which they might need to rely on -- especially if you did pass away at a younger age. But, if you aren't married and don't have a spouse who will need your help maximizing Social Security, waiting until 70 makes no financial sense when your health is poor, and outliving your life expectancy probably isn't in the cards.
If you're at risk of running out of savings
Finally, if you are not working and are relying on your savings with the goal of making it until 70 to claim benefits, you'll want to make sure you aren't draining your account dry. You need to maintain a safe withdrawal rate to make your savings last because you'll need that to supplement your benefits. If you need Social Security in order to avoid spending down your assets, you're much better off with an early claim.
In each of these three situations, delaying benefits until 70 simply isn't a smart choice -- despite what studies might say about what's optimal most of the time. You should claim at a younger age because it's the right choice given your personal financial circumstances.
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