You have earned your Social Security benefits. You should claim them when it meets your personal circumstances. For most people, though, it is best to wait as long as possible (though there is no reason to delay beyond age 70).
Although people often talk about a single retirement age, it is best to think about Social Security as having a band of ages. The earliest you can claim retirement benefits is age 62. For every month you delay up to age 70, your monthly benefit is larger – larger for the rest of your life!
The intention is for benefits to be actuarially neutral, so that your decision whether to retire and claim benefits is made independent of the size of the benefit. However, one of the enormous values of Social Security is that it is payable not only for the rest of your life but for the rest of your spouse’s life. Unlike savings and other assets, which can disappear as you age, Social Security is indexed against inflation and you cannot outlive it. Delaying receipt ensures not only that your monthly payments will be as large as possible when you are very old and likely need them most, but also as large as possible for your widow(er).
Of course, some people don’t have a job or savings at 62. In that case, people have no choice but to claim their Social Security benefits as soon as possible. Other people suffer from serious medical conditions at 62, are unmarried, and might not live long enough to benefit from delaying their Social Security benefits. But, anyone who has no reason to collect their Social Security checks early, should not do so.
Some people are simply risk averse, but some claim early because they have heard Social Security is going bankrupt. The truth is that Social Security has never missed a payment in its nearly 90-year history and almost certainly never will. Those scare stories should not scare you into claiming early, against your financial interest.
In addition to educating people about the many advantages to delaying, there are legislative improvements that should be made. While the actuarial adjustments are intended to be fair and neutral, there are strong arguments that those who retire early have their benefits reduced too much and those who retire later have their benefits increased too much. Congress should correct that.
Congress also should increase the overall level of Social Security benefits, so that even those who retire early have a benefit that is adequate for an independent dignified old age. And Congress should update the measure of inflation, so benefits retain their value, as they are intended to do.
Again, Social Security benefits are earned benefits but if you can delay claiming them, you are almost always right to do so. For the same conclusion argued somewhat differently, see Peter Coy’s opinion piece for the New York Times.
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