Is it better to collect Social Security at age 62, 66 or 70? A comprehensive study of retired worker claims provides a clear answer.

In September, more than 68 million Americans took home a Social Security benefit, including nearly 51.5 million retired workers. Even though the average retiree’s paycheck is $1,921.56, this income has proven vital to retirees’ financial well-being.

Based on a Center for Budget and Policy Priorities analysis, the poverty rate for adults 65 and older was 10.2 percent in 2022. If social security did not exist, the poverty rate for seniors would rise to about 38.7%.

In addition, the Gallup National Poll has surveyed retirees annually since 2002 to assess their reliance on Social Security income. According to responses, between 80% and 90% (including 88% in 2024) rely on their pay in some capacity to cover their expenses.

Getting as much out of Social Security as possible is a must for most current and future retirees. But to do this, you will have to understand the ins and outs of how your benefit is calculatedas well as making the most informed decision possible about your claim age. That way, you’ll know whether collecting benefits early (age 62), taking a middle approach (age 66), or waiting patiently (age 70) is the best choice.

Four variables are used to calculate your monthly Social Security check

While Social Security may offer a surprise or two to future recipients — for example, benefits may be taxed federally as well as in nine states — there is complete transparency when it comes to how your benefit is calculated. The Social Security Administration (SSA) relies on four variables to determine how much you’ll get each month:

Your work history and earnings history are tied at the hip. When calculating your monthly Social Security check, the SSA will take into account your 35 years of highest earnings, adjusted for inflation. This means that if you’ve earned a lot in wages and salaries over several decades, you’ll likely receive an above-average monthly benefit in retirement.

The caveat to the above is that the SSA will also penalize you if you haven’t spent 35 years in the workforce. For each year worked less than 35, SSA will average $0 into your calculation.

The third factor, full retirement age, is determined by the year you were born and is the age at which you are eligible to receive 100% of your monthly benefit. It is the only variable of the four that you have no control over.

The fourth component, and the one that has the potential to really swing the monthly and lifetime payment pendulum up or down, is your claim age. While eligible retired workers can start collecting their payments at age 62, there is a very clear monetary incentive to be patient. For every year a worker waits to collect their Social Security check, starting at age 62 and continuing through age 70, their benefit can increase by up to 8 percent. You can see how this decision plays out in the table below.

Data source: Social Security Administration.

Collecting benefits at ages 62, 66, and 70 comes with clear advantages and disadvantages

Despite the monthly payment variations you see above, all nine ages in the traditional claim age range of 62 to 70 have clear advantages and disadvantages. Ages 62, 66 and 70 should be among the most popular for initial collection in the coming years. Let’s take a closer look at the pros and cons associated with claiming at these respective ages.

62 years old: The most attractive aspect of collecting benefits at age 62 is not having to wait to get your hands on your benefit. This is probably why age 62 was the most popular claim age in 2022 among retired workers.

In addition, the Social Security Administration Report has warned for four decades that benefit cuts could be coming. Asset reserves for the Old Age and Survivors Insurance Trust Fund (OASI), which provides benefits to retired workers and survivors of deceased workers, are expected to be depleted by 2033. If OASI’s asset reserves are depleted, Significant benefit reductions of up to 21% can be expected.. Claiming benefits as soon as possible can be seen as a way to receive payments before a possible reduction in nine years.

On the other hand, the earliest possible claiming age may expose beneficiaries to some early filing penalties. This includes a permanent 25% to 30% reduction in your monthly benefit, depending on your year of birth, as well as potential exposure to the retirement earnings test. This “test” allows the SSA to withhold some or all of your benefits if you earn above predetermined income thresholds.

66 years old: The popularity of the middle claim approach cannot be denied. Age 66 was the second most popular claim age for retired workers in 2022, behind only 62. The beauty of collecting benefits at age 66 is that it minimizes the permanent reduction in monthly payments while providing income while you’re still young enough to enjoy it.

In contrast, much of today’s workforce (born in or after 1960) has a full retirement age of 67. This means claimants aged 66 will still be subject to a slight permanent reduction in monthly payments, as well as the retirement earnings test, until they have reached their full retirement age.

Plus, if you live to be 80, there’s a good chance you’ll have left a lot of Social Security income on the table with a middle-of-the-road claim.

70 years: Meanwhile, the advantage of collecting benefits at age 70 has to do with maximizing what you will receive monthly. Depending on their year of birth, claimants in their 70s will collect 24% to 32% more per month than they would have received at their full retirement age.

On the other hand, you’ll have to wait eight years after your original eligibility before you get a dime from Social Security. Even with the highest possible monthly payment, there’s no guarantee you’ll live long enough to maximize your lifetime collection from America’s top retirement program.

Statistically, one age is more likely than others to maximize lifetime benefits

With a better understanding of how your benefit is calculated, as well as the ramifications of claiming early, in the middle, or waiting, let’s tackle the most important question of all: Is it better to collect Social Security at 62, 66 or 70?

To be fair, there is no concrete answer that is correct 100% of the time. The reason is that we all walk a unique path. Because everyone’s financial needs, access to retirement plans, tax implications, marital status, health, and so on, will be different, this is not a one size fits all decision.

However, researchers at the online financial planning company United Income released a comprehensive report five years ago that looked at which ages, if any, offer the greatest likelihood of maximizing the collection of lifetime benefits from Security Social.

The report, “The Retirement Solution Hiding in Plain Sight,” examined the claims of 20,000 retired workers using data from the University of Michigan Health and Retirement Study to determine what age to claim would have been optimal, meaning what age of claim would have maximized a person’s lifetime collection of Social Security benefits.

Not surprisingly, given the unknowns I alluded to above, United Income found that only 4% of the 20,000 retirees studied had made an optimal claim. Without knowing our “expiration” date in advance, there will always be an educated guess involved in our claim decision.

However, the most important finding was the inverse relationship between actual and optimal claims. While 79% of the effective collection of retired workers began at ages 62, 63 and 64, only 8% of combined optimal requests occurred in this range.

At the other end of the spectrum, only a very small percentage of claimants started collecting their pay at 70. However, United Income found that 57% of the 20,000 pensioners studied would have maximized their lifetime Social Security benefits collected at this age.

For those curious, the probability of maximizing lifetime Social Security income with an age 66 claim was higher than ages 62 to 65 (not in that order), but lower than age 67 up to 70 years (also not in that order).

To reiterate, this does not mean that waiting will be the smartest move for all future retirees. If you have a chronic health condition that may shorten your life, or you are a significantly lower-income spouse who wants to generate income for the household while your significant other’s benefit increases over time, an early claim can make a lot of sense.

But on a statistical basis, the data clearly shows that waiting has its financial advantages for most retirees.