When is the Best Time to Start Social Security?

Deciding when to start receiving Social Security benefits is one of the most important financial decisions you’ll make in retirement. The timing of this decision can significantly affect your retirement income, and it’s not a one-size-fits-all choice. The best time to start Social Security depends on several factors, including your health, life expectancy, income needs, and work status. To make an informed decision, it’s essential to weigh the benefits and drawbacks of starting Social Security early, at full retirement age, or later.

Starting Social Security at Age 62

The earliest you can begin receiving Social Security benefits is at age 62, but doing so comes with a reduction in your monthly benefit. For those born after 1960, starting Social Security at 62 will reduce the benefit by 30% compared to waiting until full retirement age (typically 66 or 67, depending on your birth year). While this reduction may seem steep, starting benefits early can make sense for certain individuals.

People who may benefit from claiming Social Security at age 62 include those with significant health issues or a shorter life expectancy. If you’re not expecting to live a long life due to personal or family medical history, taking benefits early could allow you to receive more in total. Additionally, if you need the income to cover living expenses and are not able to work, starting Social Security at 62 might be the best option for you.

On the downside, starting Social Security early permanently reduces your benefit. This means that, in the long run, if you live longer than expected, you may receive substantially less than if you had delayed.

Claiming at Full Retirement Age (FRA)

Full retirement age (FRA) is the age at which you qualify to receive 100% of your Social Security benefits. For most people, FRA falls between 66 and 67, depending on their birth year. Claiming at this age ensures that you receive your full benefit without any reductions.

For those who are still working or who don’t urgently need the income, waiting until FRA can be a good middle-ground strategy. By claiming at full retirement age, you avoid the reductions associated with early benefits and secure a steady income stream that will last throughout your retirement. This is a solid option for people who are in good health, have a longer life expectancy, or plan to work part-time while receiving benefits.

Claiming at FRA also allows you to work without facing penalties. If you claim benefits before FRA and continue to work, your benefits may be reduced depending on your income. At FRA, there is no limit to how much you can earn without reducing your Social Security payments.

Delaying Social Security Until Age 70

For those who can afford to wait, delaying Social Security beyond full retirement age can increase your benefits. For every year you delay beyond FRA, your benefits increase by about 8% until age 70. This means that if you wait until age 70, you can receive up to 32% more in monthly benefits than if you had claimed at FRA.

Delaying Social Security makes the most sense for people who are in good health, have a family history of longevity, or have other sources of retirement income and can afford to delay. The higher monthly benefit can also provide a more substantial income in later years, which can be especially valuable as healthcare and other costs tend to rise with age.

However, delaying benefits does come with risks. If you wait too long and pass away before reaching the breakeven point—typically around your late 70s—you may end up receiving less overall than if you had claimed earlier. It’s also important to ensure that you have enough savings or other income to support yourself until age 70 if you choose to delay.

Conclusion

The best time to start Social Security depends on your personal circumstances, including your health, financial situation, and retirement goals. If you need income early or have health concerns, starting at 62 may make sense. For those with longer life expectancies or the ability to wait, delaying benefits until full retirement age—or even age 70—can provide higher monthly payments and greater financial security in later years. Ultimately, the decision should be based on a careful consideration of your unique needs and priorities.