Just looked into some interesting retirement data and realized most people are probably getting their Social Security timing wrong.

So here's what's actually happening: Americans are claiming later than they used to. Back in 1998, the average person grabbed their benefits around 63-64 years old. Now in 2022, that's moved up to around 65. Why? Social Security changed the rules—full retirement age went from 65 up to 66, then 67 depending on when you were born. This shift matters because the penalty for claiming early got steeper, but the reward for waiting got bigger too.

The numbers tell an interesting story. If you claim at 62, you're looking at a smaller monthly check. But if you wait until after your full retirement age, you get an 8% boost for each year you delay (if you were born in 1943 or later). So someone waiting until 70 could be getting significantly more each month compared to someone who claimed early.

Here's what caught my attention: the average new retiree in 2022 got $1,938.75 per month, which adjusted to about $2,174.86 by 2024 after cost-of-living increases. But—and this is the key part—people claiming at 65 were actually getting less than that average ($1,874.56). That suggests folks claiming earlier probably needed the money more, which makes sense if they earned less during their working years.

The conventional wisdom says 65 is the retirement age, partly because that's when Medicare kicks in. But claiming Social Security at 65 could actually be a financial mistake if you don't absolutely need it. Research from United Income found most retirees would maximize their total lifetime benefits by waiting until 70. Only about 10% would do better waiting until 67, and just 8% actually benefit from claiming before 65.

The real insight here is that following the crowd with when do you collect social security doesn't necessarily work. Everyone's situation is different. If you can afford to live on your own savings, delaying your benefits probably pays off in the long run. Life expectancy data supports this—unless you have reason to believe you'll live shorter than average, waiting typically wins out.

It's one of those retirement decisions where the smart move isn't always the popular one. When do you collect social security really depends on your specific circumstances, not just what the average person is doing.