Delaying Claiming Social Security Is Often Best, But Here Are 7 Good Reasons to Claim Early

You may not realize it, but one of the most important decisions you'll make related to your retirement is when to start collecting your Social Security benefits. A strong case can be made to wait until age 70, but there are some solid reasons to start much sooner, too.

Here's a closer look at why you might delay starting to collect your own benefits, along with seven good reasons why it might make sense to simply start early.

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Social Security basics

For starters, know that you won't just automatically start receiving your Social Security checks at a certain age, like 65. Instead, you have a choice. You can start collecting Social Security retirement benefits as early as age 62, or you might delay, up to age 70.

Each of us has a "full retirement age" -- at which we can start collecting the full benefits to which we're entitled, based on the Social Security Administration's record of our (inflation-adjusted) earnings during our working lives. For most of us, it's 66 or 67, and for those born in 1960 or later, it's 67.

Start collecting your benefits before your full retirement age, and the checks will be smaller -- though you'll receive many more of them. Delay starting to receive them beyond your full retirement age, and they will get bigger -- by about 8% per year, until age 70. Here's the percentage of your full benefits you'll receive, depending on when you start:

Source: Social Security Administration. 

Why you might delay collecting Social Security benefits

Clearly, delaying can be a powerful move, making your benefits 24% or 32% bigger. Those bigger benefits will also mean bigger cost-of-living adjustments (COLAs) in most years.

For example, imagine that your benefit would be $2,000 per month if you started at your full retirement age of 67. If you delay collecting Social Security until age 70, the benefit will be $2,480. If your first COLA is 5%, that would be an increase of $100 for a $2,000 benefit and an increase of $124 for a $2,480 benefit. That might not seem like a big deal, but it will be, over many years.

Delaying can help you get the most total dollars out of Social Security, too, if you live beyond the break-even age of about 80. And if you're married and you've earned more, overall, than your spouse, it can be a savvy strategic move to maximize your benefits. That's because if you die first, your spouse will get to collect the larger of your two benefit checks.

Why you might start collecting your benefits early

Still, there are some compelling reasons to start collecting Social Security early, too. Here are seven of them:

• You might simply need the money -- especially if you end up retiring earlier than planned, due to a job loss or health setback perhaps.
• If your health isn't great and you stand a decent chance of living a shorter-than-average life, that's another reason to consider turning on the spigot early.
• If the stock market has fallen recently, you may want to delay retiring until it recovers, so that you're not having to draw from your investment accounts when they've shrunk.
• If you're aiming to build as big a nest egg as possible (perhaps in order to leave more for your heirs), it might make sense to start collecting benefits early, in order to take less from your nest egg, allowing it to grow more. By taking less from investment accounts, you'll be able to postpone getting taxed on those withdrawals, too.
• If you have plenty of money and an ample income, you might simply start collecting benefits early so that you can invest that money and it can, ideally, grow. (Of course, delaying collecting it will also make the benefit grow -- and an 8% annual increase can be hard to beat.)
• If you're retiring before age 65, when you can enroll in Medicare, Social Security benefits may help you pay for private health insurance.
• If you have a pension coming to you and it will pay you significantly more if you wait a few years, starting Social Security early may help keep you afloat until your pension starts paying you.

As you can see, there are a lot of considerations when deliberating when to start collecting your benefits. Think through your decision from different angles and perhaps even consult a financial advisor before pulling the trigger. Be sure to coordinate your strategy with your spouse if you're married, too.

A well-planned retirement is likely to be a more financially secure one.