Your claiming decision could have a very large impact on what you're ultimately paid by Social Security.
As you can see, there's some pretty significant crossover that begins around 2034 through 2037. What this implies is that persons who claim early are, somewhere around their 78th to 81st year of age, being passed in lifetime benefits by those who've chosen to wait longer to claim benefits. For instance, an individual who claims Social Security at age 62 has, by age 85, earned approximately $28,200 less than an individual born in 1955 who waited until his or her full retirement age at 66 years and two months.
What this chart suggests
This illustration serves an important purpose for seniors, pre-retirees, and working Americans. It demonstrates the magnitude of your claiming decision.
On one hand, waiting longer will obviously lead to a larger monthly payment. However, that assumes you live to see your 85th birthday, which for all of us is more of a guessing game. When deciding whether you should claim earlier or later, you'll need to take some critical and personal factors into account, including your health, your savings, and whether or not you're taking care of anyone else financially.
Generally speaking, people in poor health, those who are buried under debt, spouses with substantially lower income than their partner, and people who can't get a job or generate income are best off filing for Social Security benefits earlier rather than later. Plus, a "mulligan" of sorts exists (Form SSA-521) that allows seniors to undo their claiming decision within the first 12 months of filing for benefits should they suddenly land a job or regret their early claiming decision.
Conversely, higher-earning spouses, people with little to nothing saved for retirement, and healthier individuals are often best off waiting until their full retirement age or later to claim Social Security.
It's a personal decision for everyone, but this should help make it that much easier.
(Fool.com)
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