MoneyLifeCalcYou can start Social Security retirement benefits at any time from age 62 to age 70. The longer you wait, the larger every monthly check will be for the rest of your life. That makes the claiming decision one of the largest financial choices most people make, and one that is very hard to undo.
The three ages that matter
- 62 is the earliest you can claim. The benefit is permanently reduced.
- Full retirement age is when you receive 100% of the benefit you earned. It is 67 for anyone born in 1960 or later, and between 66 and 67 for those born from 1955 to 1959.
- 70 is when the increases for waiting stop. There is no reason to delay beyond it.
How much the benefit changes
If your full retirement age is 67, claiming at 62 cuts the monthly benefit by 30%. Each year you wait past full retirement age adds 8%, so claiming at 70 pays 124% of the full amount. For someone whose full benefit is $2,500 a month, that is $1,750 at 62, $2,500 at 67, and $3,100 at 70.
The check at 70 is 77% larger than the check at 62. Both are adjusted for inflation every year, so the gap in dollars keeps widening.
The break-even age
Waiting means giving up checks now in exchange for larger checks later. The break-even age is when the larger checks have made up for the ones you skipped. Using the same $2,500 example, our Social Security claiming age calculator shows that waiting from 62 to 70 pulls ahead after age 80.4, and waiting from 67 to 70 pulls ahead after age 82.5.
What that means in dollars depends on how long the benefit is collected. If this person lives to 78, claiming at 65 would have collected the most. At 85, claiming at 70 collects about $558,000 against $483,000 for claiming at 62. At 92, the totals are about $818,400 and $630,000.
Why break-even is not the whole story
It is natural to treat this as a wager on your own life expectancy. A better way to see it is as insurance. Social Security is income that cannot run out and that rises with inflation. If you die earlier than expected, the smaller lifetime total will not have harmed you. If you live into your nineties, when savings may be low and other income fixed, a check that is 77% larger matters a great deal. Delaying protects you in the outcome where you most need protection.
Reasons to claim earlier
- You need the income and have no other way to cover essential expenses.
- You have a serious health condition or a family history that makes a long retirement unlikely.
- You are the lower-earning spouse, and the household plan is for the higher earner to wait.
Reasons to wait
- You are in good health and have long-lived relatives.
- You are still working. Before full retirement age, benefits are temporarily withheld if you earn more than a yearly limit, which removes much of the point of claiming early.
- You are the higher earner in a married couple.
- You can cover expenses from savings or work for a few years.
If you are married
Couples should plan together, because the decision of one affects the other. When one spouse dies, the survivor keeps the larger of the two benefits and the smaller one stops. That means the higher earner's benefit will be paid for as long as either spouse is alive. When the higher earner waits, the couple is buying a bigger check for whichever of them lives longer.
A spouse with little work history of their own may also qualify for a spousal benefit of up to half of the other spouse's full retirement age amount. Spousal benefits do not grow past full retirement age, so there is no advantage in delaying one beyond that point.
Using savings to bridge the gap
One common approach for people who retire in their early sixties is to live on savings for a few years so that Social Security can start later and larger. It draws savings down sooner, but it replaces them with guaranteed income for life. Our Retirement planner lets you set the age Social Security starts and see how the plan holds up either way. The guide to whether your retirement savings will last covers the wider picture.
Before you decide
- Sign in at ssa.gov and check your earnings record for errors. Your benefit is based on your highest 35 years of earnings.
- Write down your estimated benefit at 62, at full retirement age, and at 70.
- If you are married, do the same for your spouse and look at the two together.
- Remember that part of your benefit may be taxable, depending on your other income. Up to 85% can be included in taxable income.
- Know that you have a limited chance to change your mind: within 12 months of claiming, you can withdraw the application if you repay what you received.
Rules for spousal, survivor, and disability benefits have many details beyond a short guide. The Social Security Administration can explain how they apply to you, and a fee-only financial planner can help with a household plan.