Say you’re 62 and just retired. Your benefit is ready, you’ve paid into the system for forty years, and part of you just wants to start the checks. That’s a fair feeling. It’s also a decision you’ll live with for the rest of your life, so it’s worth a closer look before you file.
You can start Social Security any time between 62 and 70. Start early and every check is smaller. Wait, and every check is bigger. That part is simple. Deciding what’s right for you is where it gets interesting.
Start with your full retirement age
Your full retirement age is when you get 100% of the benefit you’ve earned. If you were born in 1960 or later, that’s 67. Born a bit earlier, it’s somewhere between 66 and 67.
File at 62 with a full retirement age of 67 and you’ll get roughly 30% less, for good. Hold off past your full retirement age and your benefit grows by 8% for every year you wait, up to 70. That’s a big difference between the earliest and latest checks.
So why would anyone take it early?
Plenty of good reasons. If your health isn’t great, or you need the income now and don’t have savings to bridge the gap, starting sooner can make sense. Waiting only pays off if you’re around long enough to collect those larger checks.
On the other hand, if you’re healthy and your parents lived into their 90s, waiting often works out better over a lifetime.
If you’re married, it’s a team decision
This is the part people miss most often. A spouse can get a spousal benefit worth up to half of the higher earner’s full benefit. And when one of you passes away, the surviving spouse keeps whichever check is larger.
So when the higher earner waits, it isn’t just about their own income. It can mean a bigger check for the spouse who outlives them, possibly for many years.
A few other things to keep in mind
- Still working? If you file before your full retirement age and keep earning, part of your benefit can be held back once your pay goes over a yearly limit. You get credit for it later, but it’s often simpler to wait until you stop working.
- Taxes. Depending on your other income, up to 85% of your benefit can be taxed. Money you pull from an IRA or 401(k) counts toward that income.
- It’s hard to undo. Once you’ve filed, changing your mind is very limited, so take your time.
A good first step is to log in to your my Social Security account and look at your estimates at 62, at your full retirement age and at 70. Seeing the actual numbers side by side tends to make the choice a lot clearer.
Want to talk it through?
Our free Social Security Maximization class walks through all of this with real examples, and you can ask about your own situation. No tuition, no sales pitch.
A quick note: this is general information, not tax, legal or investment advice. The rules change from time to time, and your situation is your own, so check with a professional before you act on anything here.