Social Security is a federal program in the United States that provides financial benefits to eligible individuals, including retirees, disabled workers and survivors of deceased workers. It serves as a safety net to ensure financial stability for those who are no longer earning an income due to retirement, disability or loss of a loved one.

There are a few key terms to understand when discussing Social Security:

• Primary Insurance Amount (PIA): The benefit amount a person is entitled to, based on their earnings history.
• Full Retirement Age (FRA): The age at which a person qualifies for 100% of their Social Security benefits, depending on the year they were born.

Deciding When to Collect Social Security: Pros & Cons

Choosing when to collect Social Security is a critical financial and personal decision. Claiming anywhere from ages 62 to 70 comes with unique advantages and trade-offs.

Claiming Social Security at 62

Psychological Benefits

At age 62, Social Security offers the earliest access to benefits, though at a permanently reduced amount. Emotionally, it can provide meaningful relief by easing financial stress for those who need income right away. It also provides individuals more freedom and flexibility to retire on their terms, which can positively impact mental well-being by reducing financial uncertainty.

Financial Benefits

From a monetary perspective, the key advantage is immediate access to funds. This can supplement other income sources and potentially preserve retirement savings in the short term. Additionally, those who claim at age 62 start collecting sooner, making it more advantageous for those with a shorter life expectancy.

Drawbacks

Emotionally, if the reduced benefit does not cover essential expenses, it could lead to ongoing financial stress or anxiety. Monetarily, the decision to claim early results in a permanent reduction of benefits—up to 30% less than what you'd receive at full retirement age. As a result, individuals may need to lean more heavily on personal savings if Social Security income alone doesn't meet their needs.

Claiming Social Security at 67

Psychological Benefits

At age 67, you reach what’s considered your Full Retirement Age (FRA)—if you were born in 1960 or later—making this a balanced and popular option for many retirees. Emotionally, claiming at age 67 can offer peace of mind by delivering a full, unreduced benefit that reflects your full work history. For many, it also represents the psychological reward of waiting and receiving the full value of what they've contributed throughout their career.

Financial Benefits

Financially, claiming at 67 years old means you receive 100% of your Primary Insurance Amount (PIA), which can help preserve other retirement assets. Compared to claiming at age 62, it creates a stronger income foundation and can provide larger survivor benefits if you were to pass away. This timing often provides a greater sense of financial stability and security, reducing the need for supplemental income in your retirement years.

Drawbacks

Emotionally, this strategy assumes stable health and the ability—or willingness—to continue working or drawing down other resources until FRA. Unexpected life events or health challenges could limit your ability to fully enjoy your retirement years. Some may also feel they’ve missed out on valuable time by waiting to start benefits. It is important to weigh your potential longevity, need for the income and survivorship needs.

From a monetary standpoint, 67 years old is a middle ground: while you avoid the penalties of early claims, you also forego the additional growth available by waiting until age 70.

Claiming Social Security at 70

Psychological Benefits

Choosing to claim Social Security at age 70 is a strategic move for those seeking to maximize their monthly benefit and secure greater financial stability later in life. This approach can offer peace of mind through a larger base income. Delaying benefits also opens a window while in your 60s to take advantage of proactive tax strategies—such as Roth conversions—without triggering Social Security-related income thresholds. For some, the confidence of having a higher guaranteed income later can reduce anxiety about outliving their savings or facing market volatility in their older years.

Financial Benefits

Delaying Social Security until age 70 allows you to receive the maximum possible monthly benefit. For each month you wait beyond full retirement age at 67, your benefit increases by approximately 0.67%, adding up to an 8% boost per year, for a total increase of up to 24%. These delayed retirement credits create a stronger income floor, reducing reliance on investment returns and offering greater financial security, especially valuable for those with longer life expectancies or a desire to leave a more stable legacy.

Drawbacks

There are trade-offs for delaying benefits. Emotionally, the biggest challenge is the uncertainty of life expectancy—there’s always the risk that you might not live long enough to fully benefit from the increased payments. Delaying Social Security also postpones access to income during a stage of life when many people are hoping to enjoy greater freedom, travel or reduced work obligations. From a financial perspective, the delay may require deeper drawdowns from personal savings in the interim, which could add strain to your portfolio or limit discretionary spending in your 60s.

Making the Best Choice for You

The right timing depends on your financial needs, health, lifestyle goals and retirement plans. Consider:

• Do you need income now, or can you afford to wait?
• How does your health impact your decision?
• Would delaying benefits give you better financial flexibility?
• Do you have a spouse or dependents who may rely on survivor benefits?

Final Thoughts

There’s no one-size-fits-all answer when it comes to claiming Social Security benefits. Your decision should reflect your health, income needs, retirement goals and family situation, not just the dollar amount at a given age.

Once you claim it, your benefit is locked in. Take time to align your choice with both your current needs and long-term peace of mind. The goal is to make a decision that you can look back on with confidence and satisfaction, knowing it was the best fit for you.

The team at Busey Wealth Management can help ensure you have a solid financial roadmap in place—whether for today or the years to come. To find an advisor near you, visit busey.com/wealth-management.

This is not intended to provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients should obtain their own independent tax advice based on their particular circumstances.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

This presentation is for general information purposes only. It does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client.