One of the more meaningful decisions you'll make in your life, financially speaking, is when to start collecting your Social Security benefits. Start early and your checks will be smaller (though you'll collect many more of them, of course) -- and if you start later, your checks will be larger (though you'll receive fewer of them).
There are good reasons to start early or later. Here's a look at them.
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Claiming your Social Security benefits early or late
Before tackling reasons to claim early or late, it's useful to understand just how much bigger or smaller your benefits will be, depending on when you claim them. Know that everyone has a "full retirement age" at which they can start collecting the full benefits to which they're entitled, based on their earnings history. For most workers, and for everyone born in 1960 or later, it's 67.
But you can start the checks rolling as early as age 62 -- or you might delay up until age 70. The table below shows the effects of timing:
|
Start Collecting at: |
Full retirement age of 66 |
Full retirement age of 67 |
|---|---|---|
|
62 |
75% |
70% |
|
63 |
80% |
75% |
|
64 |
86.7% |
80% |
|
65 |
93.3% |
86.7% |
|
66 |
100% |
93.3% |
|
67 |
108% |
100% |
|
68 |
116% |
108% |
|
69 |
124% |
116% |
|
70 |
132% |
124% |
Data source: Social Security Administration.
Clearly, timing can make a big difference. If your benefits at your full retirement age of 67 would be, say, $2,000, you'd receive $1,400 if you started at 62 or $2,480 if you started at 70. In annual terms, those figures become $24,000, $16,800, and $29,760.
Why take Social Security long before age 70
So -- why might you claim your benefits early, such as at age 62 or 63? The best reason is simply because you have to. Sadly, millions of Americans are approaching and entering retirement without sufficient funds. If you're among them, starting to collect whatever you can from Social Security as soon as you can may be a smart move. (It's also smart to consider delaying retiring for a few years, if you're able.)
There are other reasons to consider starting Social Security early, and a particularly good one is if you stand a decent chance of living a shorter-than-average life. Your health may be poor, for example, or you may have plenty of relatives who died young. If so, starting early with smaller checks can give you more, in total, from the program than starting later with bigger checks. (Much depends on your break-even age.)
Starting Social Security early may also permit your retirement accounts to grow more, since you won't have to tap them as much early on. It's smart to take some time to come up with a solid retirement plan that can guide you. It will involve figuring out how much you need to retire with and what retirement income streams you can rely on, among other things.
Why wait until age 70 to claim Social Security benefits
Meanwhile, there are sensible reasons to delay claiming your benefits, too. For example:
- You might be financially in good shape and able to wait until age 70 to maximize your benefits.
- You might stand a good chance of living a longer-than-average life.
- You might be coordinating with your spouse, and aiming to maximize your benefit, which your spouse can later claim if you die first.
- A 2019 study found that 57% of adults will maximize their chance of affording retirement by waiting until age 70.
- By maximizing your checks, you'll also get more out of every cost-of-living adjustment (COLA).
There's no one-size-fits-all age at which to claim your Social Security benefits, so think through your decision carefully.
