Is it better to take Social Security at 62 or 67? Why it's worth waiting if you can.

When should you file for Social Security? That's the question many Americans really begin to seriously consider as they approach their early 60s.

Nearly one in three Americans begin receiving Social Security benefits at age 62. More than half of Americans file for Social Security before their full retirement age. 

In some cases, those are the best strategies – but not always. Here are three no-brainer reasons to claim Social Security at age 67.

1. Make more money working

Arguably the best reason to wait until age 67 to receive Social Security benefits is that you'll probably be able to make more money working. After all, the average Social Security monthly retirement benefit of $1,837 is well below the average monthly income of $4,621. 

Sure, you could file for Social Security benefits before you reach 67 and continue to work. However, keep in mind that your benefits could be reduced significantly.

The Social Security Administration (SSA) will deduct $1 in benefits for every $2 you earn above an annual limit. That limit is $21,240 in 2023. In the year you reach your full retirement age (which is 67 for anyone born in 1960 or later), your benefits will be reduced by $1 for every $2 you make above the limit.

When you reach your full retirement age, you'll begin to be credited for all of the benefits that were withheld. However, waiting to file for Social Security could be more advantageous for many Americans.

2. Higher Social Security benefits

That leads us to the second major reason why holding off until age 67 to collect Social Security benefits makes sense: Your monthly benefit will be higher.

SSA will reduce your Social Security benefit by five-ninths of 1% per month for early retirement up to 36 months before your full retirement age. If you begin collecting benefits sooner than that, the amount you receive will be reduced by five-twelfths of 1% per month.

For example, let's suppose your full retirement age is 67 and you decided to retire at 62. Your monthly Social Security benefit will be reduced by 30% (36 months times five-ninths of 1% plus 24 months times five-twelfths of 1%). 

3. More time to save for retirement

There's another no-brainer reason to wait until age 67 to begin receiving Social Security benefits that some people might not think about. It gives you more time to save for retirement.

Social Security was designed to provide only around 40% of your pre-retirement income. You'll almost certainly need other sources of income during your retirement years.

Pushing back your retirement until age 67 will allow you to sock away more money into your 401(k), IRA, or other retirement accounts. It also could help the money you've already invested grow even more. You should consider consulting with a financial advisor the closer you get to retirement to determine the best ways to invest your retirement funds. 

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Reason to wait even longer

If you really want to maximize your Social Security benefits, you can delay retirement even longer. You could wait until you reach age 70 to begin collecting your Social Security check. This approach will boost your monthly benefit by 24%. 

There is a potential downside to holding off, though. If you don't live long enough, your cumulative lifetime Social Security benefits could be less than if you had begun receiving benefits earlier.

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