When Is the Best Time To Collect Social Security?

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Have you heard of the Stanford marshmallow experiment? Researchers gave children one marshmallow. They promised a second marshmallow if the kids waited 15 minutes before eating the first one.

It’s a fun lesson in delayed gratification. As “adults,” we may chuckle watching the kids who don’t wait to eat the first marshmallow. But many of us don’t act all that differently with Social Security.

Best Time To Collect Social Security

Determining when to take Social Security is an important decision. The longer you wait to start getting your Social Security money, the more you’ll get paid each month.

You can do the paperwork to start your benefit any time after your 62nd birthday. You’ll max out your benefit amount if you wait until you’re 70 years old.

Perhaps not surprisingly, 62 is the most popular age to begin claiming Social Security benefits. Reports vary, but about one-third of Americans started cashing Social Security checks at 62 as of the end of the 2010s. That number has trended down over time, although it tends to increase during economic turbulence.

Fewer than 10% of Americans wait until 70 years old to get their maximum Social Security money.

That’s despite the fact that the population is living longer. According to the Social Security Administration, the average 65-year-old man will live 84.1 years; the average 65-year-old woman will live 86.7 years. So the average 65-year-old woman can expect to live nearly 25 years after first becoming eligible to take Social Security.

People are living into their 90s more often. For them, delaying Social Security and waiting for larger checks could help prevent financial struggles late in life.

Delaying Social Security provides a form of insurance against a long retirement. The extra money it provides can temper financial risks from inflation, market uncertainty and expensive health care.

“The odds overwhelmingly show that a lot of us are going to live a lot longer than we thought,” money expert Clark Howard says. “So the best time to take Social Security is to wait as long as you possibly can.”


Table of Contents


Why Clark Howard Plans To Wait Until 70 To Collect Social Security

I’ll share the full list of reasons to take Social Security early a little later in this article. But there are two logical incentives to take your benefit before your Full Retirement Age (FRA). And they often overlap.

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You may need the money to pay your monthly bills or you’re no longer working.

Clark celebrated his 66th birthday in June 2021. He’s been an excellent saver his entire life and doesn’t need Social Security money to pay for his daily needs. He’s also still working.

If you wait until 70 years old to take Social Security, you’ll get your maximum benefit. Perhaps the main reason Clark plans to wait until 70 to collect is to get extra insurance against living a long time.

“I believe that we’re in a different health era. I work out virtually every day of my life. And I optimistically expect longer life than my dad or my grandads,” Clark says. “My mom lived until 92. That’s a factor.

“I’m still working in my 60s. There’s a disadvantage to me taking Social Security now working because of the way Social Security punishes you to a certain point if you are still working. So especially for me, it’s smart to wait the full run until I turn 70 to start receiving Social Security.”


How Much Money Can You Save By Delaying Your Social Security Benefit?

Thinking about our own death isn’t a happy topic. But deciding when to take Social Security usually requires estimating how long you’ll live — a crucial but unknown variable.

On a happier note, thanks to modern medicine, many of us will live into our 90s.

Let’s take a look at the difference your longevity, or lack thereof, can make. Using Fidelity’s calculator, I’ve run the numbers for a 60-year-old married man making $70,000 per year:

AgeExpected LongevityMonthly BenefitLifetime Benefit
62Living into your 70s$1,809$282,204
67Living into your 70s$2,584$248,064
70Living into your 70s$3,204$192,240

As you can see, a man who dies in his 70s could get $89,964 more from his Social Security benefit by claiming it at 62. That’s despite his monthly checks being $1,395 less — or $16,740 per year — if he starts his benefit at 62 versus 70.

Now let’s assume the same man will live into his 90s instead of his 70s:

AgeExpected LongevityMonthly BenefitLifetime Benefit
62Living into your 90s$1,809$716,364
67Living into your 90s$2,584$868,224
70Living into your 90s$3,204$961,200

By waiting until age 70 to start taking Social Security, this man can earn a whopping $244,836 more in his lifetime. Those larger monthly checks ($3,204) will come in handy as his retirement nest egg dissolves and his medical bills grow.

The longer you live, the more beneficial it would’ve been to hold out for your maximum benefit.

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Your family history and health can give you some clues about how long you may live. But it’s ultimately an educated guess.

One thing’s for sure: The longer you live, the more of a strain it will be on your retirement savings. In that way, maxing out your Social Security can be a huge help.


When To Take Social Security: Special Considerations for Married Couples

You may not realize how long people live today, statistically speaking. The potential for longevity carries extra implications for married couples deciding when to take Social Security.

About one in three 65-year-olds today will live until at least 90. The average married couple that’s 65 years old has at least a 50% chance that one person will live into their 90s.

Men still outearn women in the workforce on average in 2022. But the gap was larger when current retirees entered the workplace.

Because Social Security benefits are based on your 35 highest-earning years, men in their 60s often get larger Social Security checks than women. On average, women also live longer than men.

The Social Security administration accounts for this in two ways.

First, the spousal benefit gives the lesser-earning spouse up to 50% of the higher earner’s check, regardless of work history. The higher earner must be collecting their benefit before that becomes a possibility. This protects stay-at-home parents or those with large gaps in their employment history.

Second, if the higher earner dies first, the lesser earner can assume their benefit. It sometimes makes sense for the higher earner to delay their claim as long as possible. That way, if anything happens, the lesser-earning spouse can have some additional financial protection for the rest of their lives.


Pros: Why You Want To Collect Social Security Early

It’s easier for most people to fear dying early than living much longer than average.

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“And yet here I am saying, ‘Well, if you wait, you’re going to make so much more money from Social Security over the years,'” Clark says. “But if you’re worried that you’re not going to have those years, that would be a psychological reason to go ahead and file for Social Security.”

You may want to take Social Security early if you:

  • Need Social Security to support yourself. Maybe you’ve lost your job due to COVID-19. Maybe you’re unable to work any more. Perhaps you’re trying to pay off a mortgage and need some extra cash. If you need money to put food on the table, take Social Security early.
  • Have a low life expectancy. If you have a terminal disease, a family history of early death or poor health, the odds may dictate that you shouldn’t wait until your 70th birthday to start collecting Social Security.
  • Are the lower-earning spouse. It can make sense for the spouse who earned less money during his or her career to take Social Security earlier. If you’re married and your spouse dies, you’ll keep whichever Social Security check is higher: yours or theirs. Higher-earning spouses can delay claiming until 70 (or at least their Full Retirement Age). If they were to die first, the surviving spouse would get a larger check. In the meantime, you’re hedging your bets by having at least one of you take Social Security earlier.
  • Want to invest and risk earning at least 8%. Before you reach your Full Retirement Age (FRA), your benefit will grow 5% to 7% each year. From the time you reach your FRA until you turn 70, that figure increases to 8%. So you can take early Social Security and attempt to outpace the automatic increases you’d get on your Social Security by waiting. But once you’re in your 60s, it isn’t ideal to take big investing risks. So attempting to outperform the built-in increases is a major gamble.
  • Want to delay drawing down on your investments. It’s possible that accessing your investments — such as drawing down from a traditional 401(k) or IRA account — will trigger taxes that you want to put off for now. Or maybe you can’t access your investment funds until you reach a certain age.
  • Need to pay off high-interest debt. You shouldn’t postpone your Social Security benefit if you’re near or at retirement and you have high-interest debt through a credit card or any other means. Depending on your rate, the yearly benefit boost you’d get by waiting (up to 8%) may not be enough to compensate for the interest you owe.
  • Plan to give and share more immediately. Maybe you’re a diligent saver and you earned plenty of money during your career. You don’t foresee needing Social Security to pay your bills. But you want to use the money now to spoil your grandkids, travel or give to one of your favorite charities. That could be a reason to start taking your benefit early.
  • Are concerned about the viability of Social Security in the future. The Social Security Administration says that the current program is producing enough money to pay for the benefit through 2034. In 2035, without an adjustment from Congress, the SSA will have to reduce the benefit amount to 75% of what it pays currently.
  • Lose your ability to contribute to an HSA. If you delay Social Security and are not yet on Medicare, you could become ineligible to make any further contributions to your HSA account.

Cons: Why You Should Wait To Take Social Security

Have you decided when to take Social Security?

Although few people do it, delaying until 70 is the best choice for many people.

You may want to wait if you:

  • Want to maximize the size of your benefit. If your goal is to get the biggest possible Social Security check for the rest of your life, waiting until you’re 70 — or as close to it as you can — will pay off.
  • Have enough income to support yourself. If you don’t need the check to pay your bills, at least for a few more years, waiting can benefit you. You don’t need to take the money just because you can as soon as you turn 62.
  • Enjoy a longer life expectancy. Clark’s mom lived into her 90s. He exercises frequently and monitors his health closely with multiple wearables. If you have a similar background, or have reason to believe your lifespan may be longer than the average person, the odds may favor delaying your benefit.
  • Want a de facto insurance policy against a long life. One of the hardest financial uncertainties is accounting for how long you’ll live. It’s a bit cruel because the longer you live, the more likely that you’ll have a medical situation that increases your burn rate and depletes your savings. Of course, if you live into your 90s, waiting until you’re 70 can help ensure that you get a nice-sized check every month.
  • Want to continue contributing to an HSA. Taking your Social Security benefit early can make you ineligible to contribute to an HSA.
  • Are the higher-earning spouse. As I mentioned in the last section, if the spouse with the higher Social Security check dies first, the surviving spouse can start collecting the higher amount instead of their original amount. Following this strategy — making sure the spouse that earned less during their working days is in the best possible position — means delaying your benefit.
  • Are still working. Depending on your income, your Social Security benefits may be taxed. Also, if you’re taking Social Security before your FRA and are over the limit ($19,560 for those younger than their FRA and $51,960 for those who have reached their FRA in 2022), the Social Security Administration will deduct $1 of your benefit for every $2 you earn. That number rises to $1 for every $3 you earn at your FRA and disappears at 70. You’ll eventually get the withheld dollars added back into your benefit.

Frequently Asked Questions About When To Take Social Security

What is My FRA (Full Retirement Age)?

Your Full Retirement Age, or FRA, is the point at which you’re eligible for 100% of your Social Security benefit. If you were born in 1960 or later, your FRA is now 67 years old. It’s earlier than 67 if you were born prior to 1960.

If you take Social Security at 62, the SSA reduces your full benefit by 30%. If you wait past your FSA, your benefit will increase 0.67% per month, or 8% a year, until you start to claim it. There’s no incentive to wait past 70 to claim.

How Do I Calculate My Break-Even Point?

Determining when to take Social Security can get complicated. But the bottom line is that if you live long enough, waiting to take your benefit will pay off at some point.

In other words, how long do you have to live if you take your benefit after 62 in order to make it pay off?

One financial expert told CNBC that the typical break-even point for someone who waits until 70 years old is about 82½. There are calculators that help you determine your break-even point depending on the ages you’re considering to start your benefit.

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But if you agree with Clark and view Social Security more like an insurance policy than a math equation, your break-even point is less significant.

Will Social Security Run Out of Money?

It depends on what you mean. At the current rates, the Social Security Administration says it will need to reduce the payouts to 75% of its current levels in 2035.

However, Congress could restructure Social Security before then. One option would be to raise more money by increasing taxes.

It’s impossible to know what the government will do. Expect something to change within the next 12 years. Still, it seems unlikely that the federal government will abolish Social Security any time soon.

How Do My Income and Work History Affect My Social Security Benefit Amount?

Your Social Security benefit is based on the 35 highest-earning years of your working life. If you work more than 35 years, your lowest-earning years aren’t included in the calculation. If you work less than 35 years, you’ll get a few zeros in your calculation.

In 2022, your benefit gets calculated like this:

  • 90% of the first $1,024 of your average monthly earnings in those 35 years
  • 32% of your earnings from $1,025 to $6,172
  • 15% of your earnings over $6,172

Add all those amounts together and round down to the nearest 10 cents. That’s your initial payment.

Can I Change My Mind About Taking My Social Security Benefit?

Surprisingly, you’re allowed to change your mind about taking Social Security once. You can pay back what you’ve received, including Medicare payments and taxes deducted. Then you can restart your benefits at a later date with a higher payout.

But you have to change your mind within 12 months of initially receiving Social Security.

Does Social Security Account for Inflation?

Yes. The government issues COLAs (Cost of Living Adjustments). The 2022 COLA amounted to 5.9%, the highest amount in nearly 40 years.

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COLA increases don’t always keep up with true inflation. But at least there’s a decent level of protection.

How Does Your Income Impact the Taxes You’ll Owe on Your Social Security Benefit?

Your “combined income” determines whether you’ll owe taxes on your Social Security benefit. To get your combined income, add your adjusted gross income, your non-taxable interest payments and 50% of your Social Security benefit check.

You can be taxed up to a maximum of 85% depending on your combined income. Especially if you’re still working when you take Social Security, it’s a decent idea to talk to a tax professional or fiduciary financial advisor.

How Do I Know When I’m Eligible To Collect Social Security?

You must be at least 62 years old and you must hold at least 40 Social Security credits to be eligible for your benefit. You need to work (and pay into the system) for at least 10 years in order to earn those credits, as you can earn a maximum of four credits per year.

To track your credits — and your yearly income as far as Social Security is concerned — create a mySocialSecurity account.


Final Thoughts

Clark’s point of view is clear. If you can wait to take Social Security until you’re 70, he thinks it’s a good idea. If not, he says to wait as long as you can.

That logic makes sense. But each person’s financial circumstances and goals are different. Focus on whether you need the money immediately to pay high-interest debts or to put food on the table. Take into account whether your health and family history point to a higher or lower than average life expectancy.

Need more help? You can always consult with a fiduciary financial advisor. Clark recommends the Garrett Planning Network, which takes customers on an hourly basis.

When do you plan to start collecting Social Security? Share your opinion in our Clark.com Community!


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