The largest cohort of the baby boom generation, consisting of 30.4 million Americans, is set to turn 65 by 2030. A new study by the Alliance for Lifetime Income reveals that more than half of this group will rely primarily on Social Security for income in retirement. However, experts caution that claiming Social Security benefits before age 70 may result in reduced lifetime benefits.
Understanding your full retirement age is crucial when deciding when to claim Social Security benefits. For most current retirees, the full retirement age falls between 66 and 67. Delaying claiming benefits past full retirement age can result in an 8% benefit boost for each year up to age 70. Despite this incentive, the majority of new retirees tend to claim benefits before age 65, missing out on the potential for higher lifetime benefits.
A bipartisan group of senators is advocating for changes in terminology to reinforce the importance of delaying Social Security benefits. By considering factors like lifetime benefits, longevity protection, and immediate needs, retirees can make more informed decisions about when to claim. Even delaying benefits for a few months can significantly increase lifetime benefit income, making financial planning around Social Security crucial for retirees.