When to take Social Security: A guide to maximizing benefits and financial security

Social Security benefits is one of the most effective and efficient ways to deliver stable retirement income. But the decision to take benefits too early or waiting too long could cost you.

So how do you decide when to take Social Security benefits? Whether you start receiving benefits as early as age 62 Opens in a new window,‍ ‍ ^{See note 1} wait until full retirement age or put it off until you’re 70, the right age for you will depend on a variety of factors like your health, income needs, marital status, other sources of income like military benefits, and long-time retirement goals.

When can I start taking Social Security, and how does my age affect my benefits?

If eligible, you can start collecting Social Security benefits as early as age 62. However, your monthly amount will be permanently reduced if you claim before your full retirement age. And if you wait until you turn 70, you can increase your benefit through delayed retirement credits of as much as 8% per year beyond your full retirement age.

That’s why carefully deciding when to claim Social Security should be an important part of your retirement planning.

Claiming early at age 62

If you have worked and paid Social Security taxes for at least 10 years, you can start claiming Social Security as early as age 62. However, your benefits will be reduced permanently, possibly by as much as 30% compared to waiting until your full retirement age. If you are still working but claim Social Security at 62, your benefits may be temporarily reduced if your earnings exceed certain limits, as a result of the Retirement Earnings Test Opens in a new window.‍ ‍ ^{See note 1}

There are pros and cons to taking your benefit before you reach full retirement age. On the one hand, you’ll collect benefits earlier, and for a longer amount of time. However, your total lifetime payout might be lower, depending on how long you receive benefits. Claiming at age 62 still might make sense, though, for those with health issues or serious financial needs.

Claiming at full retirement age

Full retirement age, or FRA, is the age at which you qualify for 100% of your calculated Social Security benefits. Full retirement age varies by birth year: it ranges from 66 and 2 months to 66 and 10 months for people born between 1955 and 1959, and is 67 for those born in 1960 or later.

There can be many benefits for waiting until full retirement age to claim Social Security. For starters, you’ll receive your full benefit, and if you’re still working your earnings will no longer reduce your benefits. Waiting until full retirement age can also help protect against outliving your savings because you’ll have a higher guaranteed, inflation-adjusted income.

For married couples, delaying can also maximize survivor benefits. If the higher-earning spouse waits to claim, their delayed retirement credits increase the survivor benefit, ensuring the surviving spouse receives a permanently higher income for the rest of their life.

Waiting until age 70 to claim

For every year you delay after your full retirement age, up to age 70, you’ll receive delayed retirement credits. For those born in 1943 or later, that could increase your Social Security benefit by about 8% per year for every year you delay, for your entire retirement.

Let’s look at an example. If you were born in 1962, your full retirement age is 67. If you start benefits at age 70, you will receive a credit of 8% per year times three, the number of years you waited. So delaying Social Security benefits by three years, instead of taking your benefits at age 67, increases your benefit amount by 24%.

Waiting until age 70 to claim your benefits could be right for you if you’re still working, either you or your spouse is in good health, and you expect to exceed average life expectancy. If you’re the higher-earning spouse, waiting to claim can help ensure your surviving spouse gets the highest possible benefit.

There is no benefit to delay claiming your Social Security benefits until after age 70. Benefits stop increasing after that age, so you’ll actually lose income for every month you delay after 70.

62 versus 67 versus 70: Your benefit, by the numbers

If you’re weighing when to claim your Social Security benefit it can help to crunch the numbers to see how your claiming age could impact your monthly benefit.

Let’s look at another example for a person born in 1960, which makes their full retirement age 67. Their full Social Security benefit is $2,000 a month.

• If they claim at age 62: Their monthly benefit will be reduced by about 30%, dropping it to $1,400
• If they claim at full retirement age: They’ll receive the full benefit, or $2,000 a month.
• If they claim at 70: Their benefit will increase by 8% for every year they delay, bringing it to about $2,480 per month.

If this person waits to claim at 70 and lives until age 90, that monthly increase in their benefit check over those 20 years will give them an additional $259,200 than if they claimed at age 62.

Why do many people take Social Security early?

Many people claim their Social Security benefits at age 62, and for a variety of reasons. Sometimes it’s practical concerns: They may face an illness, job loss, or simply decide to retire early, and find that claiming at 62 feels like the most practical choice in the moment.

For others, however, it’s an emotional decision. Some people are afraid the Social Security system will run out of money before they have a chance to claim their share. And other people may feel a sense of ownership after paying taxes for years, so they have a sense of urgency about collecting their benefit at the earliest age.

Instead of making a decision driven by fear or other emotions, work with a financial planning professional to find the right balance between being financially secure and maximizing your lifetime benefits based on your personal situation. Evaluate your claiming age based on facts, not on fear.

Key factors in deciding when to take Social Security

The right age for you to claim Social Security will depend on several factors. As you weigh your decision, ask yourself these questions.

How is your health and what is your life expectancy?

People with poor health or shorter life expectancy may want to take their benefits early to ensure they receive them. Those with chronic or debilitating illnesses may also make it hard for them to work, forcing them into early retirement and making them reliant on the income from Social Security.

On the other hand, if you’re healthy or expect to live longer than the average life expectancy, the higher payout for waiting to collect your Social Security benefit can be beneficial. To calculate your projected life expectancy, try the Social Security Administration’s life expectancy calculator Opens in a new window.‍ ‍ ^{See note 1} But keep in mind it doesn’t consider factors like current health, lifestyle or family history.

What are your cash needs?

If you’re thinking about retiring early and you have sufficient resources, like an investment portfolio, a traditional pension and other sources of income, you might be able to be flexible about when you take Social Security. For example, military retirees will have a guaranteed income stream from their military pension, which may allow them to delay taking Social Security.

However, if you need your Social Security benefits to cover your expenses, you may not be able to wait. Consider whether it may be possible to delay taking Social Security until at least your full retirement age by working part time or postponing retirement, if you’re able.

Are you married?

Married couples may be able to maximize their lifetime benefits by carefully coordinating their claiming. It will depend on your spouse’s age, health and benefits, especially if your spouse earns more than you do. At full retirement age, you could take either 100% of your own retirement benefits or 50% of your spouses, whichever is higher. Coordinating your claiming age can be especially important in military families, where the non-military spouse might have interrupted civilian earnings due to frequent deployments or relocations.

If you divorce after at least 10 years and you are age 62 or older, unmarried, and your own benefit is lower than your ex-spouse’s, you may qualify to receive up to 50% of your ex-spouse’s full retirement-age benefit. If your ex-spouse has not yet filed for benefits, you must be divorced for at least two years to qualify.

Widows and widowers have the option to switch between survivor and personal benefits and may be able to start claiming survivor benefits as early as age 60, as long they were married for at least nine months and don’t remarry before age 60.

Are you still working?

If you claim before your full retirement age and continue working, Social Security may withhold some benefits if your earnings exceed certain limits. These withheld benefits are not lost: When you reach full retirement age, Social Security recalculates your benefit to give you credit for the months in which payments were withheld. This increases your monthly benefit going forward, but it does not reverse the permanent reduction that applies when you claim early.

Once you reach full retirement age, the earnings limit no longer applies. No matter how much you earn, your Social Security benefits will not be reduced by earnings.

For example, suppose you start Social Security at 62 and get $1,400 a month instead of your full $2,000 because you filed early. You keep working and earn more than Social Security’s yearly limit. In that case, Social Security doesn’t reduce each check, they withhold whole checks until they’ve held back the amount required by the earnings rules. If you earn enough that they need to withhold $4,200 for the year, they will simply hold back your first three monthly checks (3 × $1,400 = $4,200) and then start paying you again. If this ends up being 3 checks per year for 5 years, that means a total of 15 monthly payments were withheld. When you reach your full retirement age, Social Security will adjust your benefit as if you had filed 15 months later. In other words, as if you started your benefits at age 63 and 3 months instead of 62. This will raise your monthly check a bit, but you will not get back the $4,200 withheld and you will not be restored to your full retirement-age benefit of $2,000 per month.

What counts as income? Wages, net earnings from self-employment, bonuses and vacation pay are considered income; pensions, annuities and investment income are not.

Common Social Security mistakes and how to avoid them

Claiming Social Security is often permanent. You might be able to withdraw your application within 12 months, but you’ll have to repay benefits, and most claiming decisions can’t be easily undone. That’s why it’s important to avoid claiming mistakes to maximize your retirement income and protect your family.

Mistake 2: Forgetting to factor in spousal benefits

Married couples who don’t coordinate their claiming strategies can unintentionally reduce both their lifetime household income and survivor benefits. According to Social Security’s widow(er)’s limit provision, if the higher-earning spouse files early and receives a permanently reduced retirement benefit, the surviving spouse is generally limited to that reduced amount if the higher earner dies first. In other words, an early claim by the higher earner can permanently lower the survivor’s income.

Avoid this problem by planning as a household, not as individuals, and consider delaying the higher earner’s benefit if longevity risk is a concern.

Mistake 3: Ignoring taxes on Social Security benefits

Many retirees make the mistake of assuming Social Security is always tax free. Sometimes, however, it isn’t. The IRS uses provisional income to determine taxes; this includes adjusted gross income, tax-free interest and 50% of your Social Security income. If you have other sources of retirement income, like a military pension, TSP withdrawals or 401(k) or IRA withdrawals, you could accidentally push yourself into a higher tax bracket. Or you could create what’s known as a “tax torpedo”: Each additional dollar from another income source makes more of your Social Security benefit taxable up to a maximum of 85%.

Work with a financial professional to coordinate your retirement income sources and reduce unwanted tax consequences. Before you start Social Security, consider whether Roth conversions could help lower your future taxable withdrawals. Because withdrawals from taxable, tax-deferred, and Roth accounts have very different effects on your provisional income, managing the order of withdrawals can help you avoid pushing more of your Social Security into the taxable range. Effective tax planning and Social Security timing should be coordinated, not handled separately, to minimize the risk of triggering the “tax torpedo” and to keep more of your retirement income in your pocket.

Mistake 4: Failing to check your earnings report

Errors in your Social Security earnings report can impact your benefit, and it’s on you to correct them. Your benefit is based on your highest 35 years of earnings, and if wages are missing or misreported or military service credits weren’t properly recorded, you could lose money.

This can be especially important for veterans with active-duty and civilian career transitions, and for Reservists and National Guard members. Even a small increase in your corrected earnings can impact your lifetime benefit significantly: A $100 a month increase is $1,200 per year. Over 20 years, that’s $24,000 you would have missed if you hadn’t corrected your earnings report.

It's much easier to fix errors before you start claiming Social Security benefits. You can review your annual earnings history and access your benefit statements by creating a personal my Social Security account Opens in a new window.‍ ‍ ^{See note 1}

An extra mistake to avoid: Don’t let fear win.

You might be alarmed by news headlines shouting about Social Security running out of money or collapsing, or maybe you know people who died before they could claim their benefit and get what was owed to them after years of paying into the system. Don’t let panic or fear driving your decision.

While it’s smart to stay informed about program changes, making your claiming decision based on the 24-hour news cycle or anxiety about worst-case scenarios instead of crunching the numbers and relying on an analysis of your personal financial situation can reduce your long-term security and income potential.

The bottom line

There is no “one age fits all” approach for when to take Social Security. Instead, work with a financial planner to coordinate with your spouse, manage your taxes, understand your financial and health needs, and integrate your projected Social Security benefits into your broader retirement plan.

For many, especially those with other retirement income sources like military pensions or investments, careful timing can mean significantly higher lifetime income, helping provide you with the money and security to enjoy the retirement you worked so hard for.