What’s social security life expectancy?

When claiming Social Security benefits, your age and how long you expect to live can affect the total benefits you will receive over your lifetime. Usually, Social Security pays benefits over your lifetime, and you can maximize your benefits if you and your spouse live for a long time.

If you are eligible to claim Social Security benefits, you can claim the full benefit at the full retirement age (FRA) of 66 or 67, depending on your year of birth. However, if you need benefits earlier, you can claim benefits as early as 62, but the monthly benefit will be reduced permanently. If you wait longer until 70 to claim benefits, you will receive bigger monthly payouts.

Life expectancy for Social Security

Life expectancy has always been a factor for Social Security benefits since its inception. When Social Security was signed into law in 1935, the Social Security Act set age 65 as the full retirement age for people to claim benefits. At the time, life expectancy at birth was 58 for men and 62 for women, which meant that most workers would not live enough to collect Social Security benefits.

The low life expectancy in the 1930s was due to the high infant mortality rates, and once a child died at birth, it meant that they would never have worked long enough to collect Social Security benefits. However, with better healthcare and improved standards of living, life expectancy has increased to 76.1 years as of 2021. Despite the increase in life expectancy at birth, the full retirement age for Social Security has only increased to 66 and 67 for people born from 1943 to 1954 and 1960 or later respectively.

How Social Security Benefits Work

Social Security is designed to provide retirement income to individuals who worked in a covered job and contributed to the Social Security system. It works by pooling contributions from millions of workers and then paying benefits to eligible recipients as well as surviving spouses and children of deceased beneficiaries. According to the Social Security Administration, $0.85 of every tax dollar goes into the Social Security trust fund that is used to make monthly retirement payments to qualified retirees.

Before you can start collecting Social Security payments, you must accumulate sufficient credits to qualify for Social Security benefits. You need 40 work credits or 10 years of employment to qualify. For 2022, you will earn one credit per $1,510 in wages or self-employment income. You may also qualify for Social Security based on your disability.

If you have accumulated 40 credits, you must be at least 62 years to start claiming Social Security benefits. Once you attain the FRA, you will be eligible to claim unreduced benefits. If you choose to delay taking benefits longer until 70, you will receive a bigger monthly payout.

Important ages for Social Security

Here are the important ages when most people start collecting their Social Security benefits:

Age 62

If you are turning age 62 and you need income to pay your expenses, you can start claiming benefits immediately. However, your monthly payments will be permanently reduced if you collect benefits before the FRA.

If your claim benefits at 62 and your FRA is 66, you will receive 25% smaller benefits. If your FRA is 67, you will receive 30% lower benefits if you claim benefits at 62. For example, if you will be eligible to receive $1,000 at the full retirement age of 67, you will receive $700 if you claim benefits at age 62.

If you have other incomes such as state pension and 401(k) distributions, you can choose to wait until you reach the full retirement age to get the full benefits.

Age 66

If your year of birth ranges from 1943 to 1954, your FRA is age 66. At age 66, you are eligible to claim the full Social Security benefit; there will be no reductions in benefits. If you choose to delay claiming benefits after 66, your benefits will increase by 8% each year until age 70. Your benefits will increase to 108% at 67, and 132% at 70.

If your FRA is 67, and you claim Social Security benefits earlier at 66, your payouts will be reduced by 6.7%. This reduction is permanent, and you won't get this money back when you reach age 67.

Age 67

If you were born in 1960 or after, your full retirement age is 67. At this age, you will receive an unreduced Social Security benefit.

Waiting until age 67 to claim benefits means you can claim the full retirement benefits you are entitled to based on your earnings history. Workers who reach the full retirement age at 67 get a bigger benefit reduction for starting benefits earlier and a smaller increase in benefits for delaying benefits.

If you wait to collect your benefits until after 67, your benefits will increase by 8% each year until 70. This increase is based on your date of birth and the number of months you delay taking benefits. At age 70, your benefits will increase to 124%.

Age 70

You will get the maximum Social Security benefit if you delay collecting benefits until 70. As of 2022, the absolute highest benefit a recipient can receive from Social Security at 70 is $4,194. This is $849 higher than the maximum benefit of $3,345 you can receive at the full retirement age of 66. After age 70, there will be no benefits of waiting longer to take benefits.

If you expect to live a long time, waiting until age 70 to collect benefits can help you maximize your Social Security payouts. By forgoing years of benefits in your 60s, you can receive a substantially higher monthly payment when you claim benefits at 70. The benefits will increase by 24% and 32% for people with a full retirement age of 67 and 66 respectively.