On her blog, personal finance expert and bestselling author Suze Orman offers her insights on some of the most consequential decisions retirees have to make regarding their Social Security benefits.
At the top of her list is the best age to start receiving Social Security benefits. Of course, your circumstances are unique, and your decisions will depend on factors only you can know about.
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However, according to Orman, "If you are in your late 50s and in good health, you should seriously consider the upside of delaying when you start so you can earn a higher benefit."
Technically, you can start receiving your monthly Social Security benefits when you turn 62, but there is a caveat. The benefits will be considerably lower than if you elect to receive them at 66 or 67 (full retirement age for people born in 1964 or later) or 70.
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And the difference in your monthly benefit is permanent. In other words, you won't receive one amount at 62 and then get a bump when you turn 67 or 70, which is why it's so important to make this decision carefully. Every month past age 62 you delay, you get a slightly larger payment, until you turn 70, which is when you receive the full amount of your benefit.
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Suze Orman explains why delaying Social Security benefits makes sense
Over the decades, seemingly small differences can add up. Way up. Here's the math: if you're eligible to collect $1,958 per month at age 62, you can expect $2,781 at 67 and $3,449 a month at age 70.
So, if you collect starting at your full retirement age, your benefit is 30% higher than if you take "early" retirement. And if you opt for "delayed" retirement, your benefit is 76% higher than if you start at 62.
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If you're a man, the current life expectancy is 74.8 years (as of 2022, the most recent data available from the National Center for Health Statistics); women have a life expectancy of 80.2 years.
As Orman notes, people elect to collect for many reasons starting at 62. Chief among them is not wanting to 'lose out' if they die before starting to collect their benefits.
Orman is unequivocal in her advice, though, saying, "I am never going to stop pushing each of you to remain open to the value of waiting to claim your Social Security benefit if you are not dealing with a life-shortening illness."
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Suze Orman says to think years down the road regarding Social Security
Orman often urges people to engage in a "thought exercise" that involves planning the financial steps you could take today to be "kindest to your future, order self."
What will be best for you when you turn 80? 90? and beyond. If you celebrate your 65th birthday in average health, the odds are very good that you'll live into your 80s.
Related: Here's how much the average Social Security benefit will be in 2025
As Orman concludes, "From a financial standpoint, if you do live a long life, waiting as long as possible to start collecting Social Security will pay off with higher lifetime benefits."
While Orman and many experts agree it's better to wait until full retirement age, there are reasons to consider receiving Social Security benefits earlier. For example, if you're no longer working and will depend on your benefits to make ends meet, it may make sense to take the benefits at 62.
If you're in poor health and don't expect to make it to your average life expectancy, you might elect to start receiving benefits earlier, or if you're the lower-earning partner in a marriage, and your higher-earning spouse is able to wait to start receiving his or her benefits, that's another reason to consider accepting your Social Security benefits before you reach full-retirement age.
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