There’s arguably no social program extra important to the monetary well-being of our nation’s seniors than Social Safety. Yearly, Social Safety pulls greater than 21.7 million folks out of poverty, together with shut to fifteen.4 million adults aged 65 and over.
What’s extra, as much as 90% of the retirees that nationwide pollster Gallup has been surveying yearly for greater than 20 years have famous that they depend on their month-to-month Social Safety verify to cowl a minimum of some portion of their bills.
Making certain the monetary well being of future retired employees means getting as a lot as attainable out of America’s prime retirement program. However to ensure that that to occur, future generations of retirees first want to grasp what components affect their month-to-month profit, and the way their claiming age can dramatically increase or reduce what they will obtain every month, and through their lifetime, from Social Safety.

Picture supply: Getty Photographs.
The 4 components that matter when calculating your month-to-month Social Safety verify
Social Safety generally is a little bit of a unusual and sophisticated program at instances. As an example, advantages could also be uncovered to taxation on the federal degree, in addition to in 10 states. However in terms of figuring out month-to-month retired employee advantages, the 4 components utilized by the Social Safety Administration (SSA) are easy:
The primary two elements used to calculate your retired employee profit are inseparable. The SSA will use your 35 highest-earning, inflation-adjusted years when figuring out how a lot you will obtain every month. This implies in case you earn a excessive wage or wage all through your lifetime, you will most likely obtain a bigger profit throughout retirement.
Nonetheless, one essential tidbit to notice is that the SSA will penalize you in case you do not work a minimum of 35 years. The SSA will common a $0 into your calculation for yearly lower than 35 labored. Thus, you will need to work a minimal of 35 years when you’ve got any aspiration of maximizing your month-to-month and lifelong profit from Social Safety.
The third merchandise, your full retirement age (which is usually known as “regular retirement age”), particulars the age you turn out to be eligible to obtain 100% of your month-to-month profit and is solely decided by the 12 months you are born. For anybody born in 1960 or later (i.e., a lot of in the present day’s workforce), full retirement age is 67.
The fourth issue, and the one with the best bearing on what you will obtain every month from America’s prime retirement program, is your claiming age. Although advantages can start at age 62 for retired employees, Social Safety strongly incentivizes endurance. For yearly a employee waits to assert their payout, starting at age 62 and persevering with by way of age 69, their profit can improve by as a lot as 8%, as you’ll be able to see within the desk beneath.
Beginning 12 months | Age 62 | Age 63 | Age 64 | Age 65 | Age 66 | Age 67 | Age 68 | Age 69 | Age 70 |
1943-1954 | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% | 132% |
1955 | 74.2% | 79.2% | 85.6% | 92.2% | 98.9% | 106.7% | 114.7% | 122.7% | 130.7% |
1956 | 73.3% | 78.3% | 84.4% | 91.1% | 97.8% | 105.3% | 113.3% | 121.3% | 129.3% |
1957 | 72.5% | 77.5% | 83.3% | 90% | 96.7% | 104% | 112% | 120% | 128% |
1958 | 71.7% | 76.7% | 82.2% | 88.9% | 95.6% | 102.7% | 110.7% | 118.7% | 126.7% |
1959 | 70.8% | 75.8% | 81.1% | 87.8% | 94.4% | 101.3% | 109.3% | 117.3% | 125.3% |
1960 or later | 70% | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% |
Information supply: Social Safety Administration.
What is the common Social Safety profit at ages 62 and 67?
Based mostly on variables that embody your beginning 12 months and claiming age, taking your payout as quickly as attainable might cut back your month-to-month profit by as a lot as 30%. On the flip facet, exercising endurance and claiming your payout at age 70 can pump up your month-to-month profit to between 24% and 32% above what you’d have acquired at full retirement age.
Though all ages throughout the conventional claiming age vary (62 by way of 70) has its execs and cons, ages 62 and 67 are two of the extra standard decisions for retirees.
The draw of claiming retired employee advantages at age 62 just isn’t having to attend to get your fingers in your payout.
Moreover, the 2023 Social Safety Trustees Report estimated that the Previous-Age and Survivors Insurance coverage (OASI) Belief Fund might exhaust its belongings reserves by 2033. Although Social Safety is in no hazard of chapter or insolvency, sweeping profit cuts of as much as 23% could also be essential to maintain payouts by way of 2097 if the OASI’s asset reserves are depleted. An early declare might assist retirees front-run potential profit cuts.
However, the lure of an age 67 declare just isn’t having to fret a couple of discount to your month-to-month profit. Since most of in the present day’s workforce is born in or after 1960, their full retirement age is 67. This makes it a psychologically essential claiming age for lots of future retirees.
It is also price noting that life expectancy within the U.S. has risen by 13 years because the first Social Safety retired employee verify was mailed out in January 1940. Dwelling longer means there is a good probability we’ll want extra revenue later in life. Ready 5 years to assert advantages, post-eligibility, ensures that future retirees are receiving a minimum of 100% of what they’re due.
With a greater understanding of what may compel somebody to assert Social Safety advantages at ages 62 and 67, let’s dive into what beneficiaries are taking residence every month at these respective ages. Needless to say the next common profit quantities are based mostly on the age of a recipient, as of December 2022, and is not essentially indicative of the age they claimed their payout. In different phrases, age 67 beneficiaries might have claimed their profit wherever from age 62 by way of age 67.
Based mostly on yearly up to date knowledge from the SSA’s Workplace of the Actuary, the near 566,000 62-year-old beneficiaries have been bringing residence $1,274.87 in December 2022. By comparability, the practically 2.85 million 67-year-old beneficiaries acquired $1,844.83 within the comparable interval.
A distinction of simply 5 years has resulted in a median profit that is nearly 45% greater at age 67.

Picture supply: Getty Photographs.
Is there a superior claiming age?
To be truthful, there is not any excellent blueprint future retirees can observe that ensures they will obtain the utmost lifetime profit from Social Safety. With out realizing the date of your passing, there’s all the time going to be some degree of guesswork concerned.
Protecting this thoughts, the researchers at on-line monetary planning firm United Earnings tackled the age-old query of which claiming age(s), if any, are superior. They did this through the use of knowledge from the College of Michigan’s Well being and Retirement Research and analyzing the claims of 20,000 retired employees. The aim was to extrapolate these claiming choices and decide if an optimum selection was made — i.e., “optimum” within the sense that the person generated the best attainable lifetime revenue from Social Safety.
The broad-based discovering from United Earnings is that only a few claimants make an optimum determination. In different phrases, Social Safety {dollars} are finally being left on the desk.
Extra importantly, researchers discovered that optimum claiming choices have been targeting the latter half of the normal claiming-age vary. Whereas simply 8% of claimants would have maximized their lifetime payout from ages 62 by way of 64, greater than 80% of claims made at or after full retirement age would have been optimum. United Earnings particularly notes that 57% of the 20,000 claims studied would have maximized lifetime advantages if taken at age 70.
For added context, age 67 was the second-most optimum claiming age, behind age 70. Nonetheless, age 67 would have solely maximized lifetime payouts for round 1 in 10 retirees, versus the famous 57% at age 70.
To reiterate, this knowledge doesn’t suggest an early declare will not work out or make sense for some retirees. Folks with continual well being situations that might shorten their life expectancy, in addition to lower-earning spouses, could discover it makes quite a lot of sense to assert advantages early and settle for a everlasting discount to their month-to-month payout.
Since we (fortunately!) do not know our personal “expiration” date, we’re all going to take note of our monetary wants, private well being, marital standing, and different components when figuring out what claiming age is greatest.
However on a purely statistical foundation, United Earnings’s research fairly conclusively reveals that ready to assert Social Safety advantages is going to work out most of the time for future generations of retired employees.