Chapters

00:00 Introduction to When to Claim Social Security

00:35 Deciding When to Retire From PERS and When to Claim Social Security Are Independent Decisions

01:33 Window of Opportunity to Claim Social Security Based on Date of Birth

03:13 Social Security Statistics: When Do Men and Women Claim Social Security?

04:20 Factors to Consider When Deciding When to Claim Social Security

06:11 Social Security Benefit Simulation: 28 Years vs 35 Years of Earnings History and Age 62 vs Age 67 vs Age 70

08:27 Action Items for PERS Members

09:07 Preview of Next Video and Calls to Action

10:14 Legal Disclaimer

Transcript

Hi everyone, I'm Ryan Earley, vested PERS member, former public school finance officer, current financial planner, and host of the PERS Pro YouTube channel. Today, we are going to reveal the average age at which people claim Social Security, the factors that should drive your decision, and a real-world simulation of how working just a few more years and delaying claiming can impact your Social Security lifetime benefit. Let's get started.

The first thing every PERS member needs to understand is that deciding to retire from PERS and deciding to claim Social Security are independent from one another. You do not have to start them at the same time. In fact, as you decide when to retire from PERS and claim Social Security, you may move between four distinct scenarios. 

Scenario one, continue PERS work, but don't claim Social Security. You are still building PERS service credit while letting your Social Security benefit grow. Scenario two, continue PERS work and claim Social Security. You are still earning a PERS salary, but have decided to start receiving federal benefits simultaneously. Scenario three, retire from PERS, but don't claim Social Security. You have started your PERS pension, but are delaying Social Security to maximize the monthly amount. And scenario four, retire from PERS and claim Social Security.  Both streams of retirement income are active.

As we discussed in our last video, you can claim Social Security retirement benefits as early as age 62 or as late as age 70. While the focus is often on claiming at specific ages like 62 or 67, it's important to emphasize you can claim in any month from 62 to 70. There are three critical ages to keep in mind when deciding when to retire. Age 62. This is the earliest possible age to claim. Choosing this results in a permanent reduction in your monthly benefit. Full retirement age or FRA, this is the age you receive 100 % of your benefit. It depends on your birth date, but generally this falls between age 66 and 67. Age 70, your benefit stops increasing after this age. By waiting until 70 though, you maximize your monthly check through delayed retirement credits. 

As you can see in this table, your birth year is the anchor for your entire social security strategy. If you were born in 1960 or later, your full retirement age is 67. Look at the swing in those percentages. If your full retirement age is 67 and you claim at age 62, you are accepting a permanent 30 % reduction for the rest of your life. However, if you have the patience and the PERS pension to help bridge the gap, waiting until age 70 gives you a 24 % bonus above your full amount. Although there is a nominal difference of 54% between claiming Social Security at age 62 versus age 70 for someone born on or after 1960, this is actually a 77% increase in benefits between claiming at age 62 versus age 70.

So when do most people actually start claiming social security? While more people are waiting longer than they used to, many still claim as soon as they are eligible. Here is the distribution of claimants by age separated between men and women according to the 2025 Social Security Statistical Supplement for the 2024 year of action. And note, I've rounded these to the nearest whole percent.

As you can see at the bottom of the table, both men and women, on average, begin claiming Social Security at age 65. There are two ages at which we see big jumps in claiming activity. First, nearly one quarter of men and women claim the very first year they are eligible at age 62. Second, over one quarter of men and women claim at their full retirement age. 

What is interesting to me is that despite women living longer on average than men, the claiming data doesn't seem to support the idea that longevity is the primary factor when it comes to deciding when to claim Social Security. There are clearly other factors that retirees are considering and giving just as much or even more weight to. 

So what might be the factors retirees are considering or should be considering? What is your life expectancy? Although as just demonstrated, is not the sole factor to consider, it is still an important one.  Those who expect to live longer generally benefit from delaying their claim. 

What are your income needs? To me, this is the most important factor to consider for most. How much income do you need now and what other sources, like your PERS pension, do you have? The less income you need, the more likely you will be able to delay Social Security and increase your lifetime benefit. 

What is your earnings history? If you have less than 35 years of earnings history, working longer will increase your Social Security benefit. Also, If you just recently received significant promotions, working longer and increasing your average index monthly earnings can also increase your Social Security benefit. 

Are you still working? Keep in mind that there are earnings limits, as we discussed in our last video, that could result in some of your Social Security benefits being withheld if you continue to work before your full retirement age, but those would still be distributed after you reach your full retirement age. 

Do you have affordable health insurance? Remember that Medicare eligibility typically begins at 65. The more expensive your health insurance is before age 65, the more likely you will need to claim Social Security earlier and the lower your lifetime benefit will be. 

Are you eligible on someone else's record? Spousal or survivor benefits may be an option and may provide a higher benefit than your own if you eligible. Is someone else eligible on your record? 

Will other family members be eligible for benefits on your record?  Claiming earlier will open the door to benefits for others like children under age 18, while claiming later may increase the benefits for others like spouses who are significantly younger.

As you consider the factors impacting your own situation, I would encourage you to run scenarios using actual data. You can run your own simulation using the Social Security Administration's online calculator, which I will include a link to in the show notes below. 

Let's run a simulation together for an individual who was born in 1976, is currently age 50, has 28 years of earnings history, had a starting salary of $22,000 back in 1998, and made $100,000 in 2025.  Using a reasonable growth rate from 1998 to 2025 and plugging individual salaries into the online calculator for each year from 1998 through 2025, I get the following estimated monthly retirement benefits. 

Column one shows the earliest full retirement and latest claiming ages. Column two shows the estimated monthly social security benefit at different claiming ages if this PERS member retires from PERS after 28 years of earnings history. Column three shows the estimated monthly benefit at different claiming ages if this PERS member works an additional seven years and retires from PERS with 35 years of earnings history. And finally, column four shows the monthly and annual increase in Social Security benefits by working an extra seven years and claiming at ages 62, 67, or 70. 

Remember, Social Security calculates your benefit based on your highest 35 years of indexed earnings.  By working those extra seven years, you replace seven zeros with seven $100,000 plus years. This raises your AIME or average index monthly earnings and also your PIA or primary insurance amount. This table shows that depending on what age our hypothetical PERS member claims Social Security, they can expect to receive anywhere from a little under 4,000 to a little over 7,000 more per year from Social Security for the remainder of their life by working the extra seven years. If we assume our PERS retiree lives until the age of 85, this is anywhere from 91,000 to 105,000 more in Social Security benefits over their lifetime, excluding the effects of COLA.

If you are a PERS member evaluating when to claim Social Security, here are your action items for today. One, download your Social Security statement. Visit ssa.gov to get your actual earnings history. Two, run your own scenarios. Use the Social Security Administration calculators to see how different stop work dates and claim dates change your estimated monthly benefit. Be sure to run scenarios where you have at least 35 years of earnings history. Three, coordinate with family members. If you have a spouse or younger children, be sure to understand how the date you claim impacts their potential benefits by using the same online calculators.

I hope this video helps you decide when to claim Social Security. In our next video, we'll be providing an overview of Medicare for Mississippi PERS members. Please make sure you subscribe so you don't miss this and other videos in our new retirement series. 

If you found this video helpful, you can thank me by hitting the thumbs up button and sharing it with other PERS members. If you have a follow-up question about PERS or anything else related to personal finance, please visit our website at perspro.ms, click YouTube, and submit your question or topic for a future episode. 

And finally, if you are looking for a financial planner that specializes in helping PERS members plan for retirement, including deciding when to claim Social Security, please visit our website at perspro.ms to learn more about our firm and to schedule your initial consultation. Thank you for your valuable public service to the state of Mississippi. We'll see you next time.

Disclaimer, this video is for educational and informational purposes only. Neither the host nor this YouTube channel are officially affiliated with, endorsed by, or sponsored by the Public Employees Retirement System of Mississippi. Always consult a qualified professional for personal advice specific to your situation.