Social Security is essential for many Americans, lifting millions out of poverty each year. The amount of Social Security benefits that a retired worker receives at age 66 depends on several factors, including lifetime earnings, full retirement age, and claiming age. The Social Security Administration calculates benefits based on the 35 highest-earning years, and the full retirement age varies depending on the birth year. Claiming age also plays a significant role, with waiting until age 70 resulting in a higher monthly payout. On average, retired workers at age 66 received a benefit of $1,719.85 per month in December 2022. Age 66 has been a popular claiming age because it is the midpoint between the traditional claiming ages of 62 and 70, and it also serves as the full retirement age for those born between 1943 and 1954.
While age 66 may seem like a sensible choice for claiming benefits, a study by United Income found that the optimal claiming age for most retirees is after full retirement age. Age 70 was identified as the optimal claiming age for 57% of the retirees analyzed, followed by ages 67, 69, and 68. Age 66 fell in the middle in terms of optimal claims. Only a small percentage of age 66 claimants made an optimal decision. Additionally, some age 66 claimants may face the retirement earnings test, which could result in the withholding of benefits depending on their income. Overall, while age 66 is a popular claiming age, there are often better options for maximizing Social Security benefits.
In conclusion, Social Security is a vital program for Americans, providing financial stability during retirement. The amount of benefits received at age 66 is influenced by factors such as lifetime earnings, full retirement age, and claiming age. Age 66 has been a popular claiming age because it strikes a balance between waiting to maximize benefits and collecting a substantial portion of the full retirement benefit. However, research suggests that waiting beyond age 66 may lead to higher lifetime benefits. It is essential for retirees to consider their options and make an informed decision about when to claim their Social Security benefits.
