Should You Start Social Security at 62, 65, or 70? This Is the Best Age for Most Retirees, According to a Statistical Analysis

Many retirees misunderstand claiming rules—Nationwide found 40% incorrectly believe benefits automatically increase after full retirement age, yet claiming before FRA produces a permanent reduction while delaying past FRA raises benefits, with earliest eligibility at 62 and maximum payments at 70. A 2022 NBER analysis of Survey of Consumer Finances data estimates the median household headed by someone 45–62 will forfeit more than $182,000 (2022 dollars) in lifetime spending power under current claiming patterns; nearly one-quarter of new retirees claimed at 62 and almost half claimed before 66, and the study concludes most people would maximize lifetime spending power by claiming after 65 and over 90% by age 70. That said, individual longevity, liquidity needs and the desire to retire earlier can justify earlier claiming, so timing should be determined case by case with financial-advisor input.

Analysis

A Nationwide Retirement Institute survey finds 40% of participants incorrectly believe Social Security benefits automatically increase after full retirement age (FRA); the article reiterates the statutory mechanics that claiming before FRA produces a permanent reduction, claiming after FRA produces a permanent increase, earliest eligibility is 62, and maximum indexed benefits occur at age 70. A 2022 NBER paper using Survey of Consumer Finances data ran baseline and optimized claiming scenarios and estimates that continued current claiming behavior will cost the median household headed by someone age 45–62 more than $182,000 in lifetime spending power (2022 dollars). The article notes recent claiming patterns: nearly one-quarter of new retired-worker beneficiaries claimed at 62 and nearly half claimed before 66, and the NBER analysis concludes almost all workers 45–62 should wait beyond 65 and over 90% should wait until age 70 to maximize lifetime spending power. Individual circumstances—below-average life expectancy, liquidity needs, desire to retire earlier—can justify earlier claiming, so the piece recommends case-by-case planning with a financial advisor; sentiment signals attached to the piece are moderately negative and market impact is assessed as low (0.15).

Key Decisions for Investors

• Reassess client Social Security claiming assumptions and run breakeven and lifetime-income models using the NBER baseline/optimized framework, with a default scenario that delaying to age 70 materially increases lifetime spending power for clients with average or above life expectancy
• For clients with limited liquidity or below-average life expectancy, quantify the trade-off explicitly—model scenarios for claiming at 62, FRA, and 70 and prioritize solutions (bridge income, partial annuitization, or portfolio withdrawals) that address early-retirement cash needs
• Use the survey finding that 40% misunderstand claiming rules to proactively educate clients and correct default behaviors, and document client preferences about retirement timing versus lifetime spending power during plan reviews
• Monitor policy and demographic signals that could change the optimal claiming age but treat this research as a planning priority given the magnitude of the NBER $182,000 median loss estimate