The decision to file for Social Security isn't one to be taken lightly. That's because while your benefits themselves are calculated based on how much you earned during your top working years, the age at which you first claim those benefits will have a significant impact on the size of your monthly checks.

The Social Security Administration designates a full retirement age (FRA) for all recipients based on when they were born. If you first file for benefits upon reaching that age, you'll get to collect them in full, without a reduction or boost. Here's what full retirement age looks like based on the year you were born:

Year of Birth

Full Retirement Age




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months




With that in mind, you're allowed to start collecting Social Security as early as age 62. In fact, that's actually the most common age to file for benefits. But doing so will result in a sizable reduction that remains in effect for as long as you continue to collect those payments. On the flip side, you can hold off on filing for benefits past FRA, and for each year you do, you'll get an instant 8% boost in payments. This incentive runs out at 70, however, which is why that's generally considered the latest age to file for benefits.

Older man reading the newspaper


Now that you understand the consequences of claiming benefits at various ages, here are some other factors to consider when deciding when to apply for Social Security.

1. Your employment status

If you're still working and haven't yet reached full retirement age, it pays to hold off on Social Security for a number of reasons. First, if you already have an income and aren't desperate for the money, there's no sense in slashing your benefits just to get at that cash a little early.

Furthermore, while you can work and collect Social Security simultaneously, if you haven't yet reached FRA, you'll lose a portion of your benefits by virtue of that outside income. At present, you can earn up to $16,920 annually without losing any benefits, but for every $2 in earnings you bring in above that threshold, you'll forgo $1 of Social Security income. This earnings limit increases to $44,880, however, if you're turning 66 this year. Also, if you exceed that threshold, you'll lose $1 of Social Security income for every $3 you make after hitting $44,880.

Now, the good news is that whatever benefits reduction you face by working and collecting Social Security simultaneously won't be permanent; you'll get that money back in your benefits later on. Still, it's something to be aware of. Also keep in mind that once you've reached full retirement age, you can earn as much as you'd like and still collect your Social Security benefits in full. Either way, since delaying benefits until age 70 can result in a sizable boost, if you're earning an income, you may want to postpone that application as long as you can.

2. Your family circumstances

If you're single with no family members who might be eligible for survivor benefits upon your passing, then you only need to think about yourself when deciding when to apply for Social Security. But if you have family members who may be eligible for benefits upon your death, it pays to take them into consideration.

Your survivors' benefits are based on the benefit amount you ultimately get, so if you file for Social Security early, thus slashing your benefits, it's not just you who will collect smaller payments; your surviving spouse, for example, will collect less as well. Now imagine you have a spouse who outlives you by a decade or more. Losing out on that income for such a long period of time could have a huge impact on your spouse's finances. That's why if you have a family, you'll need to consider their needs as well.

3. Your level of savings

Many seniors rely on Social Security to pay the bills in retirement, so they rush to claim benefits as early as they can. But if you have a healthy nest egg, and you don't actually need the money to cover your expenses, it often pays to hold off on filing for benefits and give them a boost in the process.

Furthermore, if you're relying on Social Security to pay the bills, and you don't have much in the way of savings, it's even more crucial to hold off on filing for as long as possible. Social Security, in a best-case scenario, is designed to replace about 40% of the average worker's preretirement income. Most folks, however, need more like 80% of their former earnings to stay afloat financially during their senior years. Therefore, if you're counting on Social Security to provide the bulk of your retirement income, you should do what it takes to get the most money out of it -- namely, delaying benefits as long as possible.

The rules surrounding Social Security are rather complex, so it pays to get educated on how the program works. The more knowledge you amass, the better positioned you'll be to make the best decision with regard to your benefits.

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