According to Gallup, close to 90% of current retirees lean on their monthly average Social Security benefit payout to cover expenses.
The Average Social Security Benefit remains a critical lifeline for retired Americans, keeping over 21.7 million from poverty annually, particularly 15.4 million elders aged 65 and above
To optimize this average Social Security benefits program, future retirees are eyeing age 67 as an advantageous claiming age. This strategic move hinges on four key factors: earnings history, work history, full retirement age, and claiming age. The first two factors, earnings, and work history, are intertwined; the Social Security Administration factors in 35 highest-earning years when determining monthly benefits.
Full retirement age, determined by birth year, is the third pillar. For those born in 1960 or later, it stands at 67. Claiming age, the fourth factor, significantly impacts monthly payouts and overall average Social Security benefit.
Delaying benefits from age 62 to 69 can boost monthly payouts by up to 8%. Notably, age 67 is pivotal for future beneficiaries. Claiming benefits earlier than this can lead to a substantial 30% reduction while claiming at age 67 guarantees 100% of the average Social Security benefit.
As of December 2022, the average Social Security benefit at age 67 was $1,844.83 per month, a substantial 45% increase compared to benefits claimed at age 62
With age 67 representing the full retirement age for most of the workforce, it’s likely to become even more popular. Furthermore, the disability conversion process will further drive the surge in age 67 claims.
While age 67 seems balanced, data suggests that waiting until age 70 can yield even greater benefits for retirees. United Income’s analysis of 20,000 case studies found that age 70 would have been the ideal claiming age for 57% of participants, outperforming age 67. Thus, while 67 is a solid option, waiting until 70 could offer even more financial security in retirement.
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