When should I claim Social Security benefits? This is a key question older Americans grapple with every day.
Although benefits are available to claimants at age 62, the optimal age to claim benefits is 70, when payouts are at their maximum. The delay in claiming is the same as buying a greater inflation-adjusted annuity that will be paid for the entirety of the beneficiary’s life, the Bipartisan Policy Center, a Washington think tank, notes in a new report.
Most Americans, however, do not wait until age 70 to claim Social Security, according to the report.
The paper lays out ways the Social Security Administration could make information about Social Security more useful, consistent and clear for beneficiaries, and it recommends several policy reforms.
One thing SSA could do is reinstate the paper Social Security Statement so it can communicate annually with more Americans about their expected retirement benefits and Social Security’s rules, according to the paper. Officials could also visually redesign the statement and improve the information it provides to better highlight key points and correct common misconceptions.
SSA could also improve online tools to better emphasize the importance of claiming age and longevity insurance, present information more clearly and consistently, and target information to the workers whom it would most help.
When people make in-person office visits, SSA should ensure that claims specialists cover all necessary points by having them follow prompts on a form or computer and improving their procedure manual. The agency could also adjust how it evaluates claims specialists to prioritize the quality of information they provide to potential claimants.
The report says revising the official names of claiming ages would better reflect the implications of claiming decisions, for instance, by renaming the “early eligibility age” as the “minimum benefit age.” It says SSA should also explore how various framings affect claiming decisions.