When is the optimal time to claim Social Security?

Financial Planner David Rae explains.

There are reasons to claim Social Security at 62, but there are also reasons to wait until you are older. Claiming benefits too early could result in receiving a significantly lower amount. In other cases, you may be creating tax headaches if you receive Social Security and are still working.

When Can You Claim Social Security Benefits?

For the average American, choosing which age to start receiving Social Security will be the biggest retirement planning question. Eligibility for Social Security begins as early as the age of 62, which I think many of you know. What you probably aren’t as clear about is the fact that taking Social Security early, at age 62, will result in a monthly Social Security benefit that is a whopping 30 percent lower than if you waited until your full retirement age (currently 66 ½ for those turning 62 today).

You can also increase your Social Security benefits by delaying receipt of this lifetime retirement income. For every year you delay receiving Social Security benefits beyond full retirement age, your monthly retirement income will increase by eight percent, per year, until age 70.