Social Security: No Matter Your Age, Do Not Claim Benefits Until You Reach This Milestone

There’s a magic number to know that can help you maximize your Social Security income when you’re ready to retire. And it’s not the number you might think it is.

Most people know that you can start claiming Social Security benefits at age 62. And if you’ve done any financial planning for your retirement, you probably also know that if you wait to claim benefits until age 70, you can maximize the amount of benefit you can receive each month.

But there may not be a tremendous upside to waiting, especially if you need the income to live. Also, if claiming Social Security benefits can help you avoid turning to interest earning investments too soon or even selling stocks and other investments in a bear market, you should do so as soon as you turn 62 .

That’s because the Social Security system equalizes lifetime benefits regardless of when you claim. If you start claiming earlier, you’ll have money sooner. But if you wait to claim until age 70, you’ll get more money in a shorter amount of time to make up for the eight years you didn’t collect benefits.

However, you want to make sure you’ve worked and paid into Social Security for at least 35 years before applying for benefits.

You see, Social Security benefits are designed to match a percentage of your average salary for your highest earning 35 years. For most people, their salary increases as they get older and gain more experience in the workforce. More importantly, if you haven’t worked 35 years, Social Security still averages your wages and divides the total by 35.

So if you’ve only worked 20 years, that’s 10 more than the minimum required to collect Social Security , the Social Security Administration will add your wages from those 20 years and then divide by 35. They will count the other 15 years as $0 in earnings.

If you’re curious about how much you’ll get in retirement based on your current work history, or if you’re planning ahead for retirement, you can view the Social Security Statement with customized retirement benefit estimates at nine different ages. You’ll also see your earnings history so you can make an informed decision about when to stop working and collect Social Security.