The difference between claiming Social Security at 62 versus 70 can be hundreds of dollars per month—money that compounds over decades of retirement. Yet many people claim as soon as they're eligible without understanding the trade-offs. This guide will help you understand the options and factors to consider.
Social Security Basics
Before diving into strategies, understand the fundamentals.
How Benefits Are Calculated
Social Security benefits are based on:
- Earnings history: The highest 35 years of earnings (adjusted for inflation)
- Full Retirement Age (FRA): When you're entitled to 100% of your calculated benefit
- Claiming age: Early claiming reduces benefits; delayed claiming increases them
Full Retirement Age (FRA)
FRA depends on birth year:
- Born 1943-1954: FRA is 66
- Born 1955: FRA is 66 and 2 months
- Born 1956: FRA is 66 and 4 months
- Born 1957: FRA is 66 and 6 months
- Born 1958: FRA is 66 and 8 months
- Born 1959: FRA is 66 and 10 months
- Born 1960 or later: FRA is 67
How Claiming Age Affects Benefits
| Claiming Age | Benefit vs. FRA |
|---|---|
| 62 | 70-75% of FRA benefit |
| 63 | 75-80% of FRA benefit |
| 64 | 80-86.7% of FRA benefit |
| 65 | 86.7-93.3% of FRA benefit |
| 66-67 (FRA) | 100% of FRA benefit |
| 68 | 108% of FRA benefit |
| 69 | 116% of FRA benefit |
| 70 | 124-132% of FRA benefit |
Claiming Early (62-66)
Most people claim before full retirement age. Here's when that makes sense.
Reasons to Claim Early
- Need the income: You need the money to cover essential expenses
- Health concerns: Serious health issues suggest shorter life expectancy
- Unemployment: Lost job and need income to bridge to other retirement funds
- Strategic reasons: Allows spouse to delay for higher survivor benefit
- Other guaranteed income: Have pension or other income, use Social Security to fund early retirement
Drawbacks of Early Claiming
- Permanently reduced benefits: The reduction is not temporary
- Earnings limit: If still working, benefits may be temporarily reduced
- Lower survivor benefits: Surviving spouse may get less
- Longevity risk: May run short of money if you live long
The Earnings Test
If you claim before FRA and continue working, $1 of benefits is withheld for every $2 earned above the annual limit ($22,320 in 2024). After FRA, there's no limit. Withheld benefits aren't lost—they're recalculated to increase future payments.
Delayed Claiming (67-70)
Waiting past FRA earns "delayed retirement credits."
Benefits of Waiting
- 8% annual increase: Benefits grow 8% for each year you delay from FRA to 70
- Higher lifetime benefits: If you live past the break-even point
- Higher survivor benefits: Your spouse receives a larger benefit after you die
- Inflation protection: The higher base amount gets cost-of-living adjustments
When Delayed Claiming Makes Sense
- Good health and family history of longevity
- Still working and earning good income
- Have other resources to live on until 70
- Want to maximize survivor benefits for spouse
- Concerned about outliving savings
The Break-Even Point
The break-even point is when total benefits received by waiting equal what you would have received by claiming earlier. Generally:
- 62 vs. 66: Break-even around age 78-79
- 66 vs. 70: Break-even around age 80-81
- 62 vs. 70: Break-even around age 80-82
If you live beyond the break-even point, delayed claiming pays more total lifetime benefits.
Spousal and Survivor Benefits
Married couples have additional strategies to consider.
Spousal Benefits
- A spouse can receive up to 50% of the other spouse's FRA benefit
- The spouse must have filed for their own benefit first
- You receive the higher of your own benefit or the spousal benefit (not both)
- Claiming early reduces spousal benefits too
Survivor Benefits
- A surviving spouse can receive up to 100% of the deceased's benefit
- The amount depends on both spouses' claiming ages
- Survivor can switch between their own benefit and survivor benefit at different times
Strategies for Couples
Higher earner delays: The higher earner waits until 70 to maximize the benefit that will continue as the survivor benefit.
Lower earner claims early: The lower-earning spouse claims early to provide income while the higher earner delays.
Both wait if possible: If you can afford it, both delaying maximizes total lifetime benefits if both live long.
Ex-Spouse Benefits
- If marriage lasted 10+ years, may claim on ex-spouse's record
- Must be unmarried and at least 62
- Ex-spouse must be 62+ (doesn't need to have claimed)
- Doesn't affect the ex-spouse's or their current spouse's benefits
Factors to Consider
Every situation is different. Consider these factors.
Health and Life Expectancy
- Family history of longevity or early death
- Current health conditions
- Lifestyle factors affecting longevity
- If uncertain, remember that half of people live longer than average
Financial Situation
- Other retirement income (pensions, 401k, IRA)
- Current need for income
- Ability to work or continue working
- Risk tolerance and investment options
Marital Situation
- Spouse's age and earnings history
- Coordinated claiming strategy
- Survivor benefit considerations
- Divorce or widowhood status
Tax Considerations
- Social Security may be taxable (up to 85% if income exceeds thresholds)
- Higher benefits mean potentially higher taxes
- Timing claims around other income sources
Common Mistakes to Avoid
- Claiming at 62 without thinking: Many claim immediately without considering alternatives
- Ignoring spousal strategies: Couples leaving money on the table by not coordinating
- Assuming you'll die young: Many people underestimate their life expectancy
- Not considering survivor benefits: The higher earner's decision affects the surviving spouse
- Working and claiming early: May lose benefits to earnings test
- Not getting personalized advice: Strategies depend on individual circumstances
Getting Help
Social Security decisions are complex. Consider consulting:
- Social Security Administration: ssa.gov or 1-800-772-1213
- Fee-only financial advisor: Especially those specializing in retirement planning
- Social Security optimization software: Can model different scenarios
How to Apply
When ready to claim:
- Online: ssa.gov (fastest method)
- Phone: 1-800-772-1213
- In person: Local Social Security office
- Apply 3-4 months before you want benefits to begin
- Have Social Security number, birth certificate, and financial information ready