When To Take Social Security

Receive reduced benefits early or wait to maximize monthly payments.

Reviewed by David KindnessFact checked by Jiwon Ma

Workers deciding to retire or just entering their 60s may wonder whether they should start claiming Social Security benefits and at what age. Here are a few key factors to consider in making that decision.

Key Takeaways

• Although individuals can begin to collect Social Security as early as age 62, their benefits will be permanently reduced.
• The longer retirees can afford to wait after age 62, up to 70, the larger the monthly benefit.
• Spouses can claim benefits as early as age 62 based on their partner’s work record.

Minimum Age

The minimum age to claim benefits is 62. However, the longer recipients delay claiming Social Security, they increase the size of their monthly benefit. Claiming before full (or normal) retirement age results in a permanently reduced payout. In 2024, the maximum payout of a worker retiring at full retirement age is $3,822.

What Is Full Retirement Age (FRA)?

The monthly Social Security benefits depend on how much a worker has earned in their lifetime, the year they were born, and the age when they claim benefits.

A full monthly benefit is achieved by reaching what Social Security considers the full retirement age (FRA). FRA was 65 when Social Security began, but it has been raised to 67 for anyone born in 1960 or later.

Calculating Benefits

Assume an individual’s FRA is 66. If they start claiming benefits at age 66 and their full monthly benefit is $2,000, they’ll get $2,000 monthly. If they claim benefits at age 62, 48 months early, their benefit will be reduced to 70% of their full monthly benefit—also called the primary insurance amount. The payment will be 30% less per month, or $1,500.

The reduced benefit is permanent and only adjusted upward with annual cost-of-living adjustments (COLAs). For 2024, the COLA was 3.2%. Individuals can use the Social Security Administration (SSA) Early or Late Retirement Calculator, one of several benefits calculators provided by the SSA.

Those who wait until after age 70 to claim benefits will get an extra 8% per year.The longer retirees wait to claim after age 62, the greater the monthly benefit. Other factors should be considered, including expected longevity and whether a spouse will file for spousal benefits.

Spousal Benefits

Spouses who didn’t work at a paid job or didn’t earn enough credits to qualify for Social Security on their own are eligible to receive benefits starting at age 62 based on their spouse’s record. Spousal benefits will be reduced if the primary recipient takes Social Security before reaching their FRA. The highest spousal benefit one can receive is half of the benefit that their spouse is entitled to at their FRA.

While spouses get a lower benefit if they claim before reaching their own FRA, they will not get a larger spousal benefit by waiting to claim after their FRA—say, at age 70. However, a nonworking or lower-earning spouse may get a larger spousal benefit if the working spouse has some late-career, high-earning years that boost their benefits.

When one spouse dies, the surviving spouse is entitled to receive the higher of their benefit or their deceased spouse’s benefit. If the higher-earning spouse dies first, the surviving, lower-earning spouse will receive a larger Social Security check for life.If the surviving spouse hasn’t reached their FRA, they will be entitled to prorated amounts starting at age 60. At their FRA, the surviving spouse is entitled to 100% of the deceased spouse’s benefit or their earned benefit, whichever is higher.

Important

Divorced spouses can collect Social Security benefits based on their ex-spouse’s work record under certain conditions.

Taxes on Social Security Benefits

Social Security benefits may be partially taxable if a recipient’s combined income exceeds certain thresholds. Recipients pay federal income taxes on their benefits if their combined income (50% of benefit amount plus any other earned income) exceeds $25,000 per year filing individually or $32,000 per year filing jointly.Information on the taxation of Social Security benefits is found in Internal Revenue Service (IRS) Publication 915.

For recipients who work and collect Social Security benefits, all or part of their benefits may be temporarily withheld, depending on their earnings. Before full retirement age, recipients can earn up to $22,320 in 2024. After that, $1 will be deducted from their payment for every $2 that exceeds the limit.

Individuals who reach full retirement age in 2024 can earn $59,520. For every $3 they earn over the limit, Social Security benefits will be reduced by $1 for money earned in the months before full retirement age. Once full retirement age is reached, no benefits will be withheld.

Note

The SSA defines combined income using this formula: Adjusted Gross Income + Nontaxable Interest + Half of Social Security Benefits = Combined Income.

Timing and Health Coverage

Health insurance coverage can also play a role in deciding when to claim Social Security benefits. Recipients 65 or older must sign up for Medicare Part A and cannot add funds to their health savings account (HSA).

The SSA also cautions that even those who delay receiving Social Security benefits until over 65 might still need to apply for Medicare benefits within three months of turning 65 to avoid paying higher premiums for life for Medicare Part B and Part D.

Order a copy of the print edition of Investopedia’s Retirement Guide for more assistance in building the best plan for your retirement.

How Do Tax Considerations Affect When to Apply for Social Security Benefits?

At marginal tax rates, they may not have much of an impact on most people. Still, tax rates and income thresholds can change, so it’s worth remembering that recipients will lose less of their Social Security to taxes if they are in a lower marginal tax bracket when they begin to collect.

What Is “File and Suspend” When Claiming Social Security?

The claiming strategy “file and suspend” allowed married couples who reached their FRA to receive spousal benefits and delayed retirement credits simultaneously, but ended on Jan. 2, 2016. However, spouses born before Jan. 2, 1954, who have attained their FRA may still be able to file a restricted application. It allows them to claim spousal benefits while delaying their benefits up to age 70.

How Does Social Security Calculate Longevity?

The Social Security website calculates benefits based on the lifespan of the average retiree. However, not everyone will have an average life expectancy, so various claiming strategies must be considered. Retirees who foresee an above-average life expectancy may wait to claim benefits. Others may apply for benefits as soon as they’re eligible. Individuals can make an educated guess about when to claim benefits and try a break-even analysis. For example, a retiree may get $1,500 a month at age 62 or $2,000 a month starting at age 66 and receive roughly the same total benefits by age 77.

The Bottom Line

Individuals do not need to apply for Social Security benefits just because they’re retired. Those who can wait until age 70 will ensure the maximum payment for themselves and lock in the maximum spousal benefit. Those considering retiring should calculate the income they will need to determine the best course of action. When ready, they can apply for benefits online, by phone, or at a local Social Security office.

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