One of the toughest retirement-related decisions you might have to make is figuring out when to sign up for Social Security. You're entitled to your full monthly Social Security benefit, based on your personal earnings history, once you reach full retirement age (FRA), which is 67 if you were born in 1960 or any time after. However, you get a pretty wide range of filing ages to choose from.
The earliest age at which to sign up for Social Security is 62. But as you might imagine, there's a consequence to claiming benefits prior to FRA -- filing early results in a permanent reduction.
Image source: Getty Images.
Also, the younger you are when you sign up for benefits, the more of a hit you stand to take. In other words, if your FRA is 67, filing for Social Security at 62 will result in more of a reduced benefit than filing at 64 or 65.
You're also allowed to delay your Social Security filing past FRA. For each year you do, up until age 70, your monthly benefit will get an 8% boost.
You technically don't have to sign up for Social Security once your 70th birthday arrives. But since there's no financial incentive to delay your claim beyond that point, age 70 is generally thought of as the latest age to file.
You may have heard that age 62 is the worst age to claim Social Security. And some people might say the same thing about age 70.
In reality, though, there's no such thing as a best or worst age to file for benefits. It really boils down to what's best or worst for you.
Consider your personal situation
The argument against claiming Social Security at age 62 is that doing so slashes your benefits permanently. That could lead to financial struggles throughout retirement.
Meanwhile, you might hear that filing for Social Security at age 70 is also a poor choice because it means waiting so long to get your benefits. And if you don't end up living a very long life, you risk losing out on lifetime Social Security income by virtue of waiting.
These are certainly valid arguments. But rather than focus on them too much, focus on you -- your financial needs, your goals, and your health.
Maybe you have a pretty solid nest egg you've saved up for retirement. In that case, it may be that you can afford to collect less money each month from Social Security. If so, you may decide that filing early is a smart move for you since it'll mean getting to enjoy your benefits at an age where you might have more energy to do things like travel.
You might also decide to sign up for Social Security as soon as possible because you have known health issues and aren't convinced you'll live such a long life. That's a perfectly reasonable path to take.
Or you may decide that since your health is great, you'll delay your claim until age 70 for a higher monthly benefit. If you live well into your 90s, that move is sure to lead to more lifetime income for you.
You might also decide to wait until age 70 to sign up for Social Security if you're able to continue working and enjoy what you do. Your logic might be that you may as well grow that monthly benefit if you're able to cover your expenses from the paycheck you're still collecting.
You only have to worry about yourself
Some of your peers might opt to file for Social Security as soon as they're able to. And some might delay their claims due to various factors, like an absence of savings.
Rather than base your choice on what other people are doing or even advising, think about you. You really don't have to worry about anyone else -- the only exception is your spouse.
To be clear, if you're married, then your Social Security filing decision is something to arrive at jointly. But all told, any Social Security filing age has the potential to be a good one if you take the time to think things through before moving forward.
