When Should I Start Claiming Social Security Benefits?

Social Security retirement benefits may be reduced, increased or unaffected, depending upon your age when you start the benefits. You are entitled to your full retirement benefit (no increase or decrease) at Full Retirement Age (FRA), defined as follows:

Benefit Impact

1. Reduced benefits. If you start benefits between age 62 and your Full Retirement Age, your benefit amount will be permanently reduced up to 30 percent.
2. Full benefits. If you start benefits at your Full Retirement Age, there is no reduction or increase in your benefit amount.
3. Increased benefits. If you start benefits between your Full Retirement Age and age 70, your benefit amount will be permanently increased by up to 32 percent. Click here for more information.

Making the decision of when to start Social Security benefits involves many variables, such as age, health, marital status, income level, tax bracket, financial need and others. In terms of general guidelines, there are a few situations when starting benefits early or later may make sense.

Reasons to Start Benefits Early

• You may be in poor health and/or have a short life expectancy.
• You may be out of work and need the income now to make ends meet.

Reasons to Delay Benefits

• You are in good health and/or have a long life expectancy.
• You currently are in a federal income tax bracket of (25 percent or more), because up to 85 percent of Social Security benefits may be taxable.
• You want an increased permanent benefit amount.
• You are younger than your full retirement age and plan to earn more than the annual earnings limit ($16,920 in 2017).

Considerations based on marital status.

• Higher-earning spouses and unmarried individuals should consider claiming benefits no earlier than their Full Retirement Age, currently 66 to 67. This will enable them to earn the highest possible benefits based on additional years of earnings.
• As a general rule, the lower-earning spouse should start benefits early. The Society of Actuaries suggests the strategy of a lower-earning spouse starting his or her benefits early (age 62 or when earned income would no longer reduce benefits) while the higher earner delays as long as possible. If both live to age 70, then the higher earner starts his or her benefit at a greatly increased amount. If the higher earner dies first (say five years later, at age 75), the surviving spouse can switch to his or her now much higher benefit. The couple has enjoyed the lower earner’s benefit for years (between age 62 and 70). And, if the lower earner has a higher likelihood of outliving his or her spouse, he or she has kind of an insurance policy — the deceased’s increased Social Security benefit.
• Certain Social Security benefit claiming strategies that were used by couples to enhance survivor benefits were eliminated for many retirees by 2015 legislation. These include “file and suspend” and “restricted application.” For more information about these changes, see http://www.aaii.com/journal/article/the-changes-to-social-security-claiming-strategies.