A popular pastime among Americans of a certain age is to wage an internal debate about when to claim Social Security: At age 62? Sixty-five? Seventy?
In purely monetary terms, as it turns out, the question has a simple answer, and you can find it right on the Social Security website.
How much money you will ultimately collect in Social Security depends, in the end, on how long you live. And to answer that question, a good place to start is the Social Security Life Expectancy Calculator.
We’ll shortly get to the correct math. But first, here’s the incorrect math.
The best age to claim Social Security if you live to 74.8
According to the Centers for Disease Control and Prevention, average life expectancy is 74.8 years for an American male and 80.2 years for a female.
For a man approaching retirement, it might seem sensible to use 74.8 as a basis for calculating the ideal age to claim Social Security. As most older Americans know, the longer you wait to claim the benefit, the fatter your monthly check.
Here, then, is a quick comparison of how much cash a retiree will receive in lifetime Social Security benefits if he dies at age 74.8, depending on when he first draws a benefit check. We’ll use sample benefit figures from the Social Security website.
At age 62, our hypothetical retiree can claim a monthly check worth $1,400. Assuming he lives to 74.8, he will receive checks for 12.8 years, or 154 months. His total lifetime Social Security benefit, not including cost of living adjustments, works out to roughly $215,600.
At 65, our retiree can claim a check of $1,733. But he’ll only receive that check for 9.8 years. His total lifetime benefit drops to about $204,500.
And the numbers go downhill from there. By age 70, our retiree is reaping a check worth $2,480, but for only 4.8 years. Lifetime benefit: about $143,800.
By that math, your typical American man would be smart to claim Social Security at age 62, the first year of his eligibility.
And guess what age is most popular for claiming Social Security?
Many retirees do exactly that. According to a Bankrate analysis, 62 is the most popular age for taking Social Security.
The obvious reason why so many Americans take Social Security early is that they need the money. The average American retires at 62, according to multiple surveys. Retirees are supposed to leverage savings and other assets and income to supplement Social Security, but many Americans don’t save for retirement.
Retirees have several other reasons for claiming Social Security early.
“People say, ‘I want to get the money while I can. I don’t know how long I’m gonna live,’” said Robert Brokamp, a senior adviser at The Motley Fool.
Retirees also worry that the benefit program may run out of money. “They are concerned that Social Security is underfunded,” Brokamp said. The retirement trust fund is projected to run short of cash within a decade.
Other retirees take Social Security early because they feel they have no alternative. “Many people don’t have enough savings,” said Monique Morrissey, a senior economist at the Economic Policy Institute. “And it also makes people nervous to draw down their savings, even if it’s the right thing to do.”
Yet, both Brokamp and Morrissey believe most retirees should wait until age 70 to claim Social Security. The reason is simple human longevity.
That average human lifespan for American males we cited earlier, 74.8, is correct, but it’s misleading.
It’s the average life expectancy for a man at birth. Longevity extends as you age. By the time an American male reaches age 62, his life expectancy is a lot longer.
The best age to claim Social Security if you live to 83.6
An American male who turned 62 on March 1, has an average life expectancy of 83.6, according to the Social Security calculator. In other words, he’s likely to live another 21.6 years. A woman with that birthday can expect to live 86.5 years.
Now, let’s figure out how much money our new, longer-living hypothetical male can expect to draw from Social Security over the remainder of his expected life.
At 62, our hypothetical retiree can still claim a monthly check worth $1,400. But now, we’re assuming he lives to age 83.6. That means he’ll receive checks for 21.6 years, or 259 months. His total lifetime income, not including cost of living adjustments, now works out to roughly $362,600.
At age 65, our retiree can claim a check of $1,733. And now, he’ll receive that check for 18.6 years. His total lifetime income rises to about $386,500.
And the numbers go up from there. By age 70, our retiree is reaping a check worth $2,480, and he can expect to claim it for 13.6 years. Lifetime benefit: about $404,200.
“I’m not in the advice-giving business, but I can say things about averages,” said Gal Wettstein, a senior research economist at the Center for Retirement Research at Boston College. “When you just look at averages, you’re better off postponing claiming until as late as possible, until 70.”
Living to 100: A ‘worst-case scenario’ for retirement finance
In a 2022 working paper, three economic researchers concluded that more than 90% of Americans should wait until age 70 to claim Social Security, to maximize their benefits. Potential exceptions include people with dire money needs and those who do not expect to live much longer.
“There are people who should wait. And then there are people who have pancreatic cancer,” said Laurence Kotlikoff, a Boston University economist and co-author of the paper.
While Kotlikoff strongly urges most retirees to claim Social Security at 70, his reasons are not about average longevity. Indeed, he accuses the Social Security Administration of economic “malpractice” for posting a longevity calculator on its website.
To Kotlikoff, the reason to delay taking Social Security is based not on average longevity, but on maximum longevity. Kotlikoff says most retirees should “plan to live to your maximum age of life.” In other words, your retirement plan should assume you might live to 100.
“You have to look at the worst-case scenario,” he said. “You can’t play the odds.”
If you plan to live to 100, Kotlikoff said, all the more reason to wait until 70 to claim Social Security.
“Most households are taking Social Security as soon as they retire,” he said, “and that’s way too early.”