Tips on Delaying Social Security Benefits

Deciding whether to delay collecting your Social Security benefits is a big decision. Taking benefits at age 62 (the earliest possible time) versus waiting until full retirement age (FRA) makes a significant difference, and so does waiting until age 70. Should you delay? It depends. Here are a few questions to ask yourself.

Key Takeaways

• There is some flexibility around when you can start receiving Social Security retirement benefits.
• Starting benefits at age 62 versus waiting until full retirement age or longer can make a significant difference.
• Working and taking benefits before full retirement age could push you over the annual earnings limit, at which point benefits decrease.
• The question is whether the immediate benefit of cash flow now outweighs the larger benefits later that will come by waiting.

1. Do You Need the Money Immediately?

Those who take Social Security at age 62 (the earliest possible time) face a significant and permanent reduction in benefits compared with those who wait. This reduction drops proportionately for each year a recipient waits between 62 and their full retirement age. Waiting until your normal retirement age results in a benefit that’s about 30% higher than if you collected benefits starting at age 62. Waiting until you’re 70 results in a benefit that’s about another 32% higher than the amount at full retirement age. (There’s no incentive to wait past age 70.)  

If you decide to wait to claim a larger benefit in a few years, do you have other resources to support yourself in the interim? This might include retirement accounts such as a 401(k) plan or an individual retirement account (IRA). What about a pension, taxable investments, or real estate? The big question: What is your income in this early part of retirement?

2. Are You Still Working?

A part- or full-time job can be a plus in early retirement, but working and taking Social Security benefits before full retirement age can also push you over the annual earnings limit, which trims benefits. For 2025, the annual earnings limit is $23,400. For 2024, it was $22,320.

This means that those younger than full retirement age during all of 2025 lose $1 of benefits for each $2 they earn more than $23,400.

Important

Those who take Social Security at age 62 face a significant and permanent reduction in benefits compared with those who wait.

Those reaching full retirement age during 2025 lose $1 of benefits for every $3 they earn over $62,120 ($59,520 in 2024) until the month they reach full retirement age. Note: The Social Security Administration (SSA) counts only earnings before the month you reach full retirement age.

The annual earnings limit does go away at full retirement age, but benefits may still be taxable up to 85%, depending on your income.

If you’re working and in a high income tax bracket, you may want to delay taking benefits until your earnings are lower or until you reach age 70.

3. How Long Do You Expect to Live?

Life expectancy can be a bit of a wild card. The average life expectancy for a 65-year-old American in 2025 is 18.6 years for a male and 21.0 years for a female—a long time to provide additional money if benefits were taken too early.

Longevity calculators and actuarial tables can help determine lifespans. But also look closer to home. For those whose family isn’t especially long-lived or who have an illness that threatens to shorten their life, taking benefits sooner rather than later might make sense.

What Is the Cost of Living Adjustment for Social Security?

The cost of living adjustment (COLA) is an increase applied to Social Security benefits based on inflation. The Social Security Administration announced a COLA increase of 2.5% for 2025, which is a drop from the 3.2% announced for 2024.

Can I Work and Collect Social Security Benefits at the Same Time?

Yes, you can work and collect Social Security benefits. But, the Social Security Administration limits the amount of money you can earn after your benefits start. You can earn up to $23,400 in 2025 (it was $22,320 in 2024) if you collect benefits before full retirement age. You will have $1 deducted for every $2 in earnings above this limit. Once you reach full retirement age, you can earn up to $62,160 in 2025 (it was $59,520 in 2024). For every $3 over the limit, the SSA will deduct $1 in benefits.

Are My Social Security Benefits Taxed?

You may have to pay taxes on your Social Security benefits. This depends on your other income and tax filing status. Other income includes pension benefits, interest, capital gains, and dividends. You can see the limits and the taxable portion of your benefits based on your tax filing status on the Internal Revenue Service (IRS) website.

The Bottom Line

When to take Social Security benefits is an important decision—and a complex one. Take ample time and seek advice before deciding which way to go. And keep an eye on changing benefit levels and other shifts in Social Security. These are reviewed every year.