Kiplinger's Personal Finance
Social Security Retirement Finance Saving Investment Image Credit: Kiplinger's Personal Finance
Social Security Retirement Finance Saving Investment Image Credit: Kiplinger's Personal Finance

Claim Social Security At The Right Time

Retirees are forfeiting an average of $111,000 per household by filing for benefits early.

Eileen Ambrose

One of the biggest financial decisions you make on the road to retirement is when to claim Social Security benefits. You can take benefits as early as age 62, but that means your checks will be up to 30% less than if you wait until full retirement age (which is 66½ for today’s 62-year-olds). Or, for every year you delay Social Security beyond your full retirement age, your benefit grows by 8% until age 70.

That’s a lot of leeway—and a lot of room to make a decision that can trim benefits over a lifetime. In fact, according to a new study, today’s retirees have rarely made the right call, with only 4% taking Social Security at the financially optimal time.

Put another way: Collectively, retirees stand to lose out on $3.4 trillion in income throughout their retirement— or about $111,000 per household. Almost all of that income is being forfeited because retirees are claiming benefits too early, concluded a study by United Income, an online investment management company. (Results were based on data from roughly 2,000 retiree households, including the age they claimed benefits, their assets, gender, health and more.)

What’s best for you?

There is no single optimal time to claim benefits for everyone. If you are in poor health and unlikely to have, say, two or three decades in retirement, claiming early may be best. Or perhaps you were forced into early retirement by a layoff and had no other ch


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