When Should You Take Social Security? It Depends

Glenn Kirst is a planning excellence lead consultant at Northwestern Mutual.

After contributing to Social Security for most of your working life, you might think that you should claim your benefit at 62 in order to get as much money out of the system as possible. While it’s true that you’re eligible to claim your benefit at 62, doing so could keep you from maximizing your total benefit.

That’s because for each year that you wait (up until age 70), your monthly benefit increases. So the longer you wait to take Social Security, the bigger your monthly check will be. And you lock in that higher benefit for the rest of your life.

So how do you decide when to take Social Security? Here are a few times when it might make sense to wait.

When should you take Social Security?

If you’re still earning an income

Depending on when you were born, your full retirement age (FRA) is somewhere between 66 or 67. (You can use this Social Security Administration chart to find your individual FRA.)

In the years preceding the year of your FRA, the earnings limit is a $1.00 reduction for every $2.00 over $23,400. In the year of your FRA, for the months leading up to the your FRA month, the reduction is $1.00 for every $3.00 over $62,160.

While you won’t see as much withheld if you start claiming your benefit the year you reach your FRA, it could still take a chunk out of your benefit. So if you’re working, it may make sense to wait at least until your FRA to claim your benefit.

If you don’t need the money immediately

If you’ve planned and saved for retirement, you may be able to live off of those savings while you continue to let your Social Security benefit grow. Once you reach your FRA, your benefit will grow by 8 percent each year up until you reach age 70, which can make a big difference in the amount of money you receive each month. (After age 70, there are no further increases for delaying your benefit.)

Let’s say your FRA is age 67 and your monthly benefit is $1,000. If you claim Social Security at 62, you would receive $700 per month. But if you waited until you turned 70, your benefit would increase to $1,240. That means the difference between claiming early at 62 and waiting until you’re 70 is $6,480 per year for life.¹

¹ Please note that this example does not include cost-of-living adjustments.

If you’re healthy

Another reason to consider letting your Social Security benefit grow is if you think you might live a long time. But if you have a serious medical condition, or have been told that you’re at high risk for developing one, it may make more sense to take your benefits as soon you’re eligible. If you’re married, you still may want to hold off, because claiming your benefit early could reduce your spouse’s widow(er) benefit. Your financial advisor can help you determine what makes the most sense for your financial situation.

If you have a family history of longevity

Knowing how old your biological parents and grandparents lived to be is another factor to consider. While there are, of course, many environmental, lifestyle and medical factors that could come into play, your family history can give you a sense of your potential life expectancy and help you decide whether to start claiming your benefits sooner rather than later.