Understanding Social Security: When Should You Start Taking It?
For most people, Social Security is one of the most significant income sources they will have in retirement. Yet the decision of when to claim it is one that gets made without nearly enough thought. The timing of your claim can mean tens of thousands of dollars in lifetime benefits, so it is worth slowing down and understanding how the math actually works.
The Basics
You can begin collecting Social Security as early as age 62 or as late as age 70. The longer you wait within that window, the higher your monthly benefit. Your "full retirement age" (FRA) is determined by your birth year. For most people reading this, it falls somewhere between 66 and 67.
Claiming Early: 62 to Full Retirement Age
Claiming before your full retirement age reduces your monthly benefit permanently. Depending on how early you claim, your benefit could be reduced by as much as 30%. The upside is that you receive payments for more years. This can make sense if you have health concerns that suggest a shorter lifespan, or if you have limited other income sources and genuinely need the money.
Claiming at Full Retirement Age
Claiming at your FRA means you receive 100% of your calculated benefit with no reduction. For many people, this is the baseline from which all other decisions are measured.
Delaying Past Full Retirement Age: Up to Age 70
For every year you delay claiming past your FRA, your benefit grows by 8%. That growth stops at age 70, which is why there is no financial incentive to wait longer than that. If you are in good health and have other income to draw from in the meantime, delaying can pay off significantly over the course of a long retirement.
Married Couples: A Coordinated Strategy
For couples, the claiming decision becomes even more nuanced. One common approach is to have the lower-earning spouse claim earlier while the higher-earning spouse waits as long as possible. This maximizes the survivor benefit, which can be important if one spouse outlives the other by many years.
The Bottom Line
There is no one-size-fits-all answer to when you should claim Social Security. The right decision depends on your health, your other retirement income, your household situation, and your broader financial plan. If you would like help thinking through the timing that makes the most sense for you, our team is here to help.
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