Just 4% of people start collecting their Social Security benefits at the most advantageous time, according to an elaborate new study. Those mistimed claims—nearly all of them reflecting benefits that were begun too early—will cost US households an average of $111,000 in potential income during their retirement. The average recipient would receive 9% more if he/she had chosen the optimal time to start collecting. The study by researchers at Johns Hopkins University and investment company United Income examined Social Security income and wealth accumulation of approximately 2,000 actual households from 1992 to 2014.

People can start benefits as early as age 62, but monthly payments increase the longer a person delays, up to age 70. The total amount of Social Security income that households eventually ­receive depends on when the recipients start collecting their monthly payments…how long they live…how they invest or save money…their income and spending patterns…taxes…and various other factors.

The study found that 57% of retirees would build more wealth over their lifetimes by waiting until they reach age 70 to start collecting their Social Security benefits…and 92% would benefit from waiting until at least age 65. But in reality, 79% claim between age 62 and 64—even though starting that early proved to be advantageous for only 8% of recipients studied. 

Three reasons why most people claim too soon…

It is very difficult to predict at which age it would be best to start. The small percentage of people who benefit from claiming early tend to be those who die relatively young—but people generally don’t know when they will die unless they have a serious health condition.

They need the money. Claiming benefits early is a necessity for people who have no other assets or income in retirement. But if you have other assets, it’s generally preferable to tap them early in retirement and delay claiming Social Security.

They’re worried that the Social ­Security system will run out of money. The system’s reserves could run dry as early as 2034 if no steps are taken to fix it. But even if that happens, payroll taxes from people still in the workforce would be sufficient to pay nearly 80% of benefits and delaying likely still would be the better option.

What to do: Go to SSA.gov/planners/calculators for various calculators to estimate life expectancy, benefits and other factors to help you determine when to start collecting Social Security benefits.