Social Security is a very different program from what it once was.
The program began in the 1930s when the average life expectancy was 58 for men and 62 for women. Back then, when was the earliest they could start benefits? Age 65.
Change is Coming
In 1956 women were given the ability to collect a reduced benefit at age 62 and men got this option as well in 1961.
In the 1980s, almost 50% of people filed right at age 62, but in 2021, only 25% of people filed right at 62.
What is happening? Why are people waiting?
3 Reasons People Are Delaying Taking Social Security
There are 3 main reasons why people are choosing to delay their benefits now more than ever.
More Reductions
One of the biggest factors that determine how much you’ll get from Social Security is your FRA (Full Retirement Age). This age is based on your birth year (see chart below) and it has slowly changed from 65 to 67.
| Year Born | Full Retirement Age (FRA) 100% Benefit |
|---|---|
| 1937 | 65 |
| 1938 | 65 and 2 months |
| 1939 | 65 and 4 months |
| 1940 | 65 and 6 months |
| 1941 | 65 and 8 months |
| 1942 | 65 and 10 months |
| 1943 to 1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 and later | 67 |
Your FRA is the age you can get your “full” benefits and taking benefits before this age will cause a benefit reduction and taking benefits later would cause an increase.
The Bottom Line: The higher your FRA, the more reductions you get for filing for benefits at 62 which has pushed people to want to delay to avoid these reductions.
You Look Great For Your Age
People are working and living longer every day, and if someone is working into his or her 60s, it is less likely that he or she will draw Social Security benefits early as s/he will still have income.
The longer you expect to live, the more it makes sense to delay benefits as you have more time to collect the bigger benefit.
Internet is Making Us Smarter
The one thing that the internet does so well is it spreads information. As more information about how Social Security actually works has gotten to the masses, people have been able to make more informed decisions about their benefits.
Obviously, not all the advice on the internet is good advice, but overall it has been a net positive.
Final Thoughts
But even now, there are many situations where taking benefits right at age 62 is simply the best decision. While everyone has unique needs, these are the main things to consider when deciding when to file for Social Security.
