If you’re like most people, you can start taking Social Security payments when you turn 62. And like most people, that may not be a good idea. Let’s take a look at why that is.
70 is the New 62
The longer you wait to collect benefits, the more money you’ll get.
As Money notes, benefits can be claimed starting at age 62, but the monthly amount increases each year you put off taking benefits. If you were born in 1960 or later, you can take full benefits starting at 67. If you can wait, your benefits increase by about eight percent each year until you reach 70, then you must start taking the payments.
At age 70, your benefits are 24 percent more than what they would’ve been at 67.
Crunching the Numbers
To put this into solid numbers, a team of researchers studied workers between 45 and 62. What they found was that almost everyone would reap financial benefits if they waited until at least age 65. Those who can wait until 70 stand to reap the largest reward. The report found that Americans who wait until 70, may increase their lifetime payout by over $180,000. Not only that, while some workers only gain a few thousand by waiting, those at the high-end stand to gain over $900,000 over the course of their retirement.
Clearly, not everyone can wait until 70 to start taking Social Security benefits. If you can, this report, and the math behind the numbers, provide a compelling case worth considering.