For most retirees in the United States, the Social Security retirement benefit is a lifeline. Research from the Center on Budget and Policy Priorities shows that without this program, the poverty rate among people aged 65 and above would shoot up to 38.7%, compared to the current 10.2%.
Surveys conducted by Gallup for over 20 years also reveal that more than 90% of retirees depend on their Social Security checks to manage daily expenses.
This makes it very important for workers to understand how to maximise their retirement benefits, and why the age at which they claim Social Security—whether 62, 67, or 70—can make a big difference to their financial future.
Interestingly, a study by the University of Michigan’s Health and Retirement Study showed that out of 20,000 workers, only 4% managed to claim the maximum benefits available.
How Social Security Benefits Are Calculated
The Social Security Administration (SSA) calculates retirement benefits based on several factors. The key ones include:
Work history – Number of years you have worked.
Earnings history – Your 35 highest-earning years.
Full retirement age (FRA) – Depends on your year of birth.
Claiming age – The age when you start collecting benefits.
If you have fewer than 35 working years, the SSA fills the missing years with $0, which reduces your benefit. This makes consistent work and steady contributions essential.
Retiring at Age 62 – The Early Claim
Pros: You can start receiving money as soon as possible. Many people prefer this option as it feels safer, especially with concerns that the Old-Age and Survivors Insurance Trust Fund may run out in about nine years.
Cons: Claiming early comes with a reduction of up to 30% in monthly benefits. This means you will receive less for the rest of your life.
Retiring at Age 67 – Full Retirement Age
Pros: At this age, you qualify for your full retirement benefit, without any penalties. It offers financial security and ensures you receive what you are entitled to.
Cons: You still miss out on the extra boost available if you wait until 70.
Retiring at Age 70 – The Maximum Benefit
Pros: Waiting until 70 allows you to increase your benefit by 24% to 32%, depending on your date of birth. This can make a big difference if you live longer.
Cons: The risk is life expectancy. If health issues prevent you from enjoying those extra benefits, delaying may not be worth it.
What Age Is Best to Retire?
A 2019 report by United Income, “The Retirement Solution Hiding in Plain Sight,” analysed 20,000 retirees and their claiming ages. The results showed that only 4% actually maximised their benefits. The study concluded that age 70 is the most financially rewarding age.
About 57% of retirees would have gained more if they had waited until 70. However, since no one can predict their lifespan, the “best” age also depends on health, lifestyle, and personal needs.
Social Security retirement benefits play a crucial role in reducing poverty among older Americans. Deciding when to retire—62, 67, or 70—depends on balancing immediate needs with long-term financial security. Retiring early at 62 brings quick money but with lower benefits.
Retiring at 67 ensures full benefits, while waiting until 70 provides the highest possible monthly income. The right choice depends on your health, savings, and how long you expect to live. Planning ahead and understanding these trade-offs can help you make a smarter decision for your retirement.
