One of the most important decisions retirees face is choosing when to begin collecting Social Security benefits. Whether you start as early as age 62, wait until your full retirement age (typically 67), or delay until 70, this decision can significantly impact your monthly income and overall lifetime payout.
Understanding the pros and cons of each option will help you make the best choice based on your health, financial goals, and work situation.
The Basics of Social Security Benefits
Social Security is designed to provide monthly income based on your earnings history, with adjustments depending on when you start collecting. The amount you receive each month can vary significantly depending on your claiming age.
While claiming early means smaller payments, delaying your claim leads to higher payments but fewer years of payout.
Pros and Cons of Claiming at Different Ages
Claiming at Age 62
You can start collecting Social Security benefits at age 62, but your monthly check will be reduced by around 30% compared to what you would receive if you waited until your full retirement age (FRA). For people born in 1960 or later, FRA is age 67.
Claiming at 62 is often chosen due to health issues, job loss, or financial necessity. However, the reduction in benefits is permanent, which also impacts spousal or survivor benefits.
Waiting Until Full Retirement Age (FRA)
If you decide to wait until FRA (usually 67), you’ll receive 100% of your scheduled benefit. This is a good middle-ground option for individuals who are in average health, plan to keep working, or want to maximize lifetime benefits without delaying further.
An important advantage of claiming at FRA is that it removes the Social Security earnings limit, meaning you can work and collect benefits without any reduction in your monthly check.
Delaying Until Age 70
Delaying your claim until age 70 can result in significantly higher monthly payments due to delayed retirement credits. For each year you wait past your FRA, your benefit increases by about 8%, up to age 70.
For example, if your benefit at 67 was $2,000, it could rise to $2,480 by waiting three more years. While this option reduces the number of years you’ll collect benefits, it maximizes your monthly payments for life.
Key Factors to Consider
Life Expectancy
Your life expectancy is a major factor when deciding when to start collecting Social Security. If you’re in poor health or have a family history of shorter lifespans, claiming early may make sense.
However, if you’re in good health and have a family history of living into your 80s or 90s, delaying benefits until 70 may provide you with more total lifetime benefits.
Income and Employment
If you plan to keep working after age 62, your Social Security benefits may be reduced due to the earnings limit. In 2025, the Social Security Administration will cap annual earnings at $23,400 before benefits are reduced. Once you reach FRA, there is no earnings cap, so you can earn as much as you want without affecting your benefits.
Spousal and Survivor Benefits
The timing of your Social Security claim can also affect spousal and survivor benefits. The higher the benefit amount you lock in, the more your spouse may receive in survivor benefits. For couples, it often makes sense for the higher-earning partner to delay claiming until 70 to maximize the surviving spouse’s payout.
Other Sources of Income
If you have additional sources of income, such as savings, investments, or a pension, you might have the flexibility to delay claiming benefits. Some retirees use a “bridge strategy,” drawing from their personal retirement accounts between 62 and 70 to allow their Social Security benefits to grow larger.
Break-Even Analysis
A break-even analysis helps you determine the point at which the total amount of benefits you receive from different claiming ages equals out. For example, someone who starts collecting at 62 may need to live into their late 70s or early 80s before delayed claiming at 70 becomes financially more advantageous.
Deciding when to start collecting Social Security is a personal choice that depends on a variety of factors, including your health, income needs, and family situation.
Whether you choose to claim early, at full retirement age, or delay until 70, it’s important to consider how each option will impact your long-term financial goals. By carefully evaluating your situation, you can make a decision that maximizes your lifetime benefits.
