Social Security Claiming Strategies: When Should You Start Benefits?

One of the most important decisions you'll make in retirement is when to start claiming Social Security benefits. This choice can impact your lifetime income by hundreds of thousands of dollars.

The Basics: Age 62, 67, or 70?

You can start claiming Social Security benefits as early as age 62, but your full retirement age (FRA) is likely 67 if you were born in 1960 or later. For each month you delay claiming past your FRA (up to age 70), your benefit increases by approximately 0.67%, or about 8% per year.

Here's what this means in practice: if your full retirement benefit at age 67 is $2,000 per month, claiming at 62 would reduce it to about $1,400 (30% reduction), while waiting until 70 would increase it to about $2,480 (24% increase).

The Breakeven Analysis

Many people focus on the "breakeven age"—the age at which the total benefits received from delaying equal the total from claiming early. If you claim at 62 versus 70, the breakeven age is typically around 80-81.

However, this analysis is overly simplistic. It doesn't account for:

• The time value of money (money today is worth more than money tomorrow)
• Investment returns you could earn on early benefits
• Spousal and survivor benefits
• Tax implications
• Longevity risk (the risk of outliving your money)

Factors to Consider

Health and Life Expectancy

If you have serious health issues or a family history of shorter lifespans, claiming earlier may make sense. Conversely, if you're in excellent health and have longevity in your family, delaying can provide valuable insurance against outliving your assets.

Financial Need

If you need the income to cover basic expenses and don't have other assets to draw from, claiming early may be necessary. However, if you can afford to wait by using other retirement savings, delaying often makes financial sense.

Spousal Benefits

For married couples, the higher earner's claiming decision is particularly important because it affects survivor benefits. When one spouse dies, the surviving spouse receives the higher of the two benefits. Delaying the higher earner's benefit can provide crucial financial security for the surviving spouse.

Working in Retirement

If you claim before your full retirement age and continue working, your benefits may be reduced if you earn above certain thresholds ($22,320 in 2024). Once you reach FRA, you can earn any amount without benefit reduction.

Advanced Strategies

File and Suspend (Mostly Eliminated)

This strategy, which allowed one spouse to claim benefits while the other delayed, was largely eliminated by the Bipartisan Budget Act of 2015. However, some grandfathered cases may still apply.

Restricted Application

If you were born before January 2, 1954, you may be able to file a restricted application for spousal benefits only, allowing your own benefit to continue growing until age 70.

Making Your Decision

There's no one-size-fits-all answer to when you should claim Social Security. The optimal strategy depends on your unique circumstances, including your health, financial situation, marital status, and other retirement income sources.

Our retirement calculator includes a Social Security optimizer that compares different claiming ages and shows you the breakeven analysis customized to your situation. Use it to explore different scenarios and make an informed decision.