When Should You Take Social Security?

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When Should You Take Social Security?

When Should You Take Social Security? 

Here are the key questions to ask yourself to determine the right age to start claiming benefits.

You can claim Social Security retirement benefits as early as age 62, which also happens to be the most common age people start claiming them, according to the Center for Retirement Research at Boston College. But while it might be tempting to begin that early, you should think twice.

There can be significant long-term financial advantages to waiting until at least your full retirement age (FRA)—which is the age at which the Social Security Administration allows you to start receiving a full, unreduced benefit. (The FRA is 66 for people born between 1951 and 1959 and 67 for people born 1960 or later.) 

So, how do you decide the best time to start claiming benefits? Here are important questions to ask:

What’s your personal life expectancy?

Nobody knows exactly how long they’ll live, of course. But your personal life expectancy is an important factor when determining the best age to start Social Security. That’s because your monthly benefit lasts throughout the rest of your life—and the longer you wait to claim benefits, the more money you’ll receive each month.

Once you reach your FRA, you can delay taking benefits in order to increase your monthly payment. For every year you wait until age 70, you receive an 8 percent increase in your benefit.  For example, someone who would receive $1,300 a month at an FRA of 66 would receive about $1,660 monthly if they waited until age 70, according to the Social Security Administration. Conversely, they’d receive only $950 monthly if they began taking Social Security at age 62. Put another way: Your monthly Social Security benefit climbs nearly 75 percent between age 62 and 70.

If you live to the average life expectancy for your age group, it makes little difference when you start claiming Social Security benefits—everything will even out. But if you think you have a shorter-than-average life expectancy, you may want to claim benefits before your FRA. If you have a longer-than-average life expectancy, you may want to delay past your FRA.

So consider your personal health and family longevity when deciding what age, it makes sense for you to start claiming Social Security.

What age will you stop working?

If you’re working and you haven’t reached your FRA, your Social Security benefit may be reduced. In 2019, for example, your benefit would be reduced by $1 for every $2 you earn over $17,640 if you haven’t reached FRA. (The reduction is far less in the calendar year in which you reach your FRA.)

Therefore, it may make sense to delay benefits until you’ve stopped working. However, there’s a silver lining if you do work while getting Social Security: Your monthly benefit may be increased once you reach FRA to factor in the income you made while receiving benefits.

Are you married?

For married couples, the decision of when to start Social Security may be trickier. That’s because you can elect to take a benefit based on your spouse’s work history rather than your own. If your spouse passes away before you do, you can also receive a survivor benefit based on their Social Security benefit.

Given spousal and survivor benefits, even a spouse with a shorter life expectancy may want to delay claiming benefits in order to increase the total amount both spouses will receive.

When will you need the income?

Even if you expect to live to a ripe old age, you may realistically need the income from Social Security before age 66 or 67. It makes sense to plan for Social Security several years before you expect to start receiving it in order to incorporate it into your retirement income plans. You may decide you need additional sources of income in your early years of retirement, whether that means saving and investing more money today or working to an older age.

A BOK Financial advisor can walk you through the key considerations of deciding when to start taking Social Security based on your personal situation.


Prepared by WSJ Custom Studios.

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