Many Americans are eager to maximize their Social Security benefits, but new research from Boston University and the Federal Reserve Bank of Atlanta reveals that retirees often make costly mistakes by claiming benefits too early. The study highlights the importance of choosing the optimal age to claim Social Security to maximize lifetime discretionary income. While full benefits are available between ages 66 and 67, depending on birth year, claiming as early as 62 results in a 30% reduction in monthly payments. Conversely, waiting until age 70 increases benefits by 32%. Despite this, only 6% of workers delay claiming until 70, missing out on an average of $182,000 in lifetime income. Many claim early due to concerns about life expectancy, but experts suggest planning for a longer life to ensure financial security. Laurence J. Kotlikoff, a co-author of the study, advises using strategies to delay claiming Social Security to enhance lifetime income.
QUESTION: How might changing the age at which people typically claim Social Security impact their financial security in retirement?
A typical Social Security strategy could cost you $182,000
