By: Nick Black
Deciding when to claim Social Security benefits is a pivotal decision that impacts your financial security in retirement. You can start benefits as early as age 62, but your monthly payment amount depends on when you claim relative to your Full Retirement Age (FRA), which is typically 66 or 67, depending on your birth year. Here’s a simple guide to help you decide.
Key Factors to Consider
1. Your Financial Needs
- Claim Early (Age 62): If you need income immediately due to limited savings or unexpected expenses, claiming early may be necessary. However, your monthly benefit will be reduced by up to 30% compared to waiting until FRA.
- Delay Until 70: If you have other income sources (e.g., savings, pensions, or part-time work), delaying benefits increases your monthly payment by about 8% per year past FRA, up to age 70. This maximizes lifetime benefits if you live longer.
2. Your Health and Life Expectancy
- If you’re in poor health or have a family history of shorter lifespans, claiming earlier may make sense to maximize total benefits received.
- If you’re healthy and expect to live beyond your late 70s, delaying until 70 often results in higher lifetime payouts, as larger monthly payments accumulate over time.
3. Your Work Status
- If you claim before FRA and continue working, benefits may be temporarily reduced if your earnings exceed certain limits ($22,320 in 2025 for those under FRA). Once you reach FRA, this reduction stops, and your benefit is recalculated.
- If you don’t need to work or can manage earnings below the limit, claiming early may still be viable.
4. Spousal and Family Benefits
- Your decision affects spousal benefits. If you claim early, your spouse’s benefit (if based on your record) may also be reduced. Delaying can increase benefits for both of you.
- If you’re widowed or divorced, you may be eligible for survivor or ex-spousal benefits, which have different claiming rules. Check with the Social Security Administration (SSA) for specifics.
Break-Even Analysis
Calculate your break-even age—the point where total benefits from delaying surpass those from claiming early. For example:
- Claiming at 62 vs. FRA: Break-even is typically around age 78–80.
- Claiming at FRA vs. 70: Break-even is often around age 82–84. If you expect to live past the break-even age, delaying usually pays off.
Practical Steps
- Estimate Your Benefits: Use the SSA’s online calculator (ssa.gov) to see how your monthly payments vary by claiming age.
- Assess Your Finances: Review savings, debts, and other income to determine if you can delay benefits.
- Consult a Professional: A financial advisor can tailor a strategy based on your unique situation.
- Stay Flexible: You can withdraw your claim within 12 months (repaying benefits received) or suspend benefits at FRA to earn delayed credits.
Bottom Line
There’s no one-size-fits-all answer. Claim early if you need funds now or have health concerns. Delay if you can afford to wait and expect a longer life. Run the numbers, consider your circumstances, and make an informed choice to secure your retirement.
* Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.
Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example, you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.
