When Should I Start Social Security?

How Can Delaying Social Security Help Maximize By Benefits?

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While you can take Social Security starting at age 62, you’re not required to start your benefits immediately. Social Security Beneficiaries have the option of starting their benefits any time they wish between the ages of 62 and 70. The choice between taking the benefits early, or deferring them until later, is a complicated one, and should be considered carefully.

Taking Benefits before your Full Retirement Age

The "Full Retirement Age" is the age at which the Social Security Administration expects that most people will retire and begin taking their Social Security benefits. This age depends on your birth year.

If you were born in 1937 or earlier, then your Full Retirement age is 65, while those born after 1960 have a Full Retirement Age of 67. Should your birth date fall between 1938 and 1959, consult the table below to find your Full Retirement Age.

Date of Birth Full Retirement Age
1937 or Earlier 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943-1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 or Later 67

Once you have determined your Full Retirement Age, you can then begin to compute the effect of retiring before that age on your Social Security Benefits.

Essentially, for every month prior to your Full Retirement Age that you begin taking benefits, a small percentage (roughly 0.55%) is deducted from your Social Security benefits. Therefore, someone born in 1944 (Full Retirement Age of 66) who begins taking benefits at age 64 and a half (18 months before his Full Retirement Age), will see their monthly benefits reduced by approximately 10%.

Delayed Retirement Credits

Some people however, rather than choosing to take their Social Security early, choose instead to defer it beyond their Full Retirement Age. In such a case, the Social Security Administration will increase your Social Security benefits. For every year that you defer your benefits, you will receive a larger amount when you finally do begin drawing Social Security. The amount of the bonus is dependant, once more, on your birth date.

Date of Birth Yearly Social Security Bonus
1917-1924 3.0%
1925-1926 3.5%
1927-1928 4.0%
1929-1930 4.5%
1931-1932 5.0%
1933-1934 5.5%
1935-1936 6.0%
1937-1938 6.5%
1939-1940 7.0%
1941-1942 7.5%
1943 or Later 8.0%

For example, someone born in 1944 (Full Retirement Age of 66) who chooses to retire at age 69, will receive 8 percent more benefits for each year beyond his Full Retirement Age that he defers his benefits, for a total of 24 percent more benefits once he begins taking Social Security.

Important note: The maximum age for the above calculations is 70. While you can defer your payments beyond age 70, you receive no further benefit from doing so, as the bonus is no longer accrued beyond that point. Accordingly, nobody should wait longer than age 70 before beginning their Social Security benefits.

So When Should You Start Social Security?

The Social Security Administration established the calculations above such that people who take their benefits early or who defer them will, on average, receive the same amount of money in Social Security benefits over the course of their lives.

People who retire early receive less money per month, but do so for a longer period of time, while those who retire late get a larger benefit every month, but will generally receive it for a shorter period of time. So given that, how should you go about deciding when to take your benefits?

Essentially, there is no single right answer for everyone, meaning you have to evaluate the decision in the light of your personal circumstances. The calculations that the Social Security Administration uses are based on the average lifespan of retirees, so if you believe that your situation differs from the average, you can adjust your social security strategy respectively. By and large, the following strategies are commonly suggested by retirement experts:

  • The only people who should consider taking their Social Security early are those who absolutely need the money immediately, or those who do not expect to live for very long, due to illness
  • Should you have reason to believe that you will not live past the age of 80, then generally speaking you will maximize your social security benefits if you take them when you reach your Full Retirement Age.
  • On the other hand, if you are confident that you will live past the age of 80 or 85, then most experts recommend that you defer your social security for as long as you can (age 70), so as to maximize the benefits you receive from it.

But life expectancy is only one consideration. If you have a spouse, then the benefits of delaying your social security increase dramatically.

Bonuses accrued from Delayed Retirement Credits apply both to you and to any spousal benefits claimed. This is particularly important if your spouse had a lower income than yourself. In such a case, deferring your Social Security until age 70 can drastically increase the size of the benefits your spouse may be eligible for should they outlive you, particularly if your spouse also waits until their Full Retirement Age before taking their own benefits.

Finally, you should consider whether or not you plan to work at all during your retirement. Money you earn while drawing Social Security benefits can result in a penalty to your benefits if you have chosen to draw the benefits before your Full Retirement Age. Should you choose to work full or part time after the age of 62, it is generally best to wait until your Full Retirement Age to obtain your benefits, so as to avoid such penalties.