One of the most common questions people ask about Social Security is when they should start taking benefits. Making the right decision for you can have a meaningful impact on your financial income in retirement.
Before considering how personal circumstances and objectives may play into your decision, it may be helpful to preface that discussion with an illustration of how benefits may differ based on the age at which you commence taking Social Security.
As the chart below reflects, the amount you receive will be based on the age at which you begin taking benefits.
Monthly Benefit Amounts Based on the Age that Benefits Begin¹
Age | Benefit Amount |
62 | $1,050.00 |
*This example assumes a benefit amount of $1,500 at the full retirement age of 67 (for those born after 1960).
At first glance, the decision may seem a bit clear-cut: Simply calculate the lifetime value of the early benefit amount versus the lifetime value of the higher benefit, based on some assumed life expectancy.
The calculus is a bit more complicated than that because of the more favorable tax treatment of Social Security income versus IRA withdrawals, spousal benefit coordination opportunities, the consideration of the surviving spouse, and Social Security’s lifetime income guarantee that exists under current law.²
When it comes to this decision, there’s a lot to consider. Let’s break it down into three key questions:
- Do You Need the Money Right Now?
Sometimes life forces us to make tough choices. Whether it’s health challenges or an unexpected job loss, retiring before full retirement age isn’t always optional. If you genuinely need the income Social Security provides—even if it’s a reduced amount—taking benefits early might be the best move for you.
- What About Your Spouse’s Needs?
If your spouse plans to rely on your Social Security income, starting benefits early could impact their survivor benefits down the road. Women, on average, tend to live longer than men, so this decision can have long-term effects. It’s worth having a thoughtful conversation about how your choices now could affect your spouse in the future.
- How’s Your Health?
The big concern in retirement is outliving your savings. If you’re healthy and expect a long retirement, waiting until full retirement age—or even longer—can mean a larger monthly benefit for life. On the flip side, if you’re dealing with health issues, starting benefits earlier might make sense to ensure you get the most out of them.
There’s no one-size-fits-all answer. Take some time to evaluate your priorities, your health, and other sources of income. A well-thought-out plan can help you decide when claiming Social Security feels right for you. And remember, we’re here to help you navigate these decisions so you can feel confident about your choice.
Sources:
1. SSA.gov, 2024
2. Once you reach age 73 you must begin taking required minimum distributions from a Traditional Individual Retirement Account in most circumstances. Withdrawals from Traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Contributions to a Traditional IRA may be fully or partially deductible, depending on your adjusted gross income.