I often get asked, "Hey Nora, when is the best time to start collecting Social Security?"
Let's break it down.
If you don't have a great bill of health and/or your family doesn't have good longevity, I generally recommend you start collecting your Social Security benefit as soon as you can at age 62.
However, if these criteria don't apply to you, collecting at 62 just doesn't make sense because the average American is living into their mid-80s!
Let's look at the numbers.
If you start collecting at 62, you are going to see a rate cut that equals a 30% reduction of what you would see if you waited until you reached your full retirement age (between 66 and 67 years old).
If you start collecting at your full retirement age (between 66 and 67 years old) you will receive 100% of what was promised to you.
What's even better than 100%? How about 132%. If you wait to collect until age 70, that is what you will get! Your payment will balloon up to 132% of what was promised to you.
Over 20 years, delaying the collection of Social Security benefits from age 62 until age 70 could mean collecting an extra half million dollars in your pocket.
Lastly, you just have to live until past the age of 80 to cumulatively start to make more money.
I've said it before and I will say it again, Social Security is most definitely not peanuts.