When’s the best time to take Social Security? Here’s how to find out…


The Consumer Financial Protection Bureau has a new calculator to help you determine the optimal time to start taking Social Security.

Read more: How to get the maximum Social Security check

When is the best time for you to take Social Security benefits?

I get a call a week from people in their early 60s trying to figure out when to start taking Social Security. The deal is you can start taking partial benefits at age 62, but that means all the rest of your life your checks will be smaller because your cost of living adjustment is based on the original benefit at 62.

Until now, the best I could do was give general advice when people asked me when to take their benefits. But the CFPB’s Planning for Retirement tool allows you to pop in your specifics and it will help you figure out the optimal time. Check it out to help yourself or a parent.

As for me, my general advice to people has always involved asking them how long the average life expectancy is in their family. By doing that, I’m asking them to bet on their lifespan. But the truth is many of us will live longer than we would have imagined. Let’s say you’re married. For married couples, there’s a 72% chance that one of you will make it to your 85, according to research from the Society of Actuaries.

So as I advise people, I generally guide them to start taking their benefits later rather than sooner. That means waiting until 70. But that’s just a general guideline. If you’re 62 and you don’t have a job or the possibility of any future income, then you’d want to take Social Security as soon as possible.

But don’t leave your decision up to chance. Check out the CFPB calculator. If you prefer, AARP has its own interactive calculator too.

Read more: How to get your finances in order in 30 days

Two more things I want to mention. First, it makes sense to consider working longer for as long as you can. At least consider working part-time if you can’t do it full-time.

Second, if you have some money, but not enough that you feel you can stretch it out, you might consider doing a lifetime annuity (aka immediate payout annuity). It is the only kind of annuity I really like. With a lifetime annuity, a company turns your supply of money into a lifetime stream of income. Immediate payout annuities are entirely legitimate, but they have so little in the way of commissions that they’re never pushed by salespeople.


Here are some helpful tips to remember about Social Security

Play the waiting game

In the past, it was very common to retire and take Social Security at 62. But every year you wait after 62, you have an imputed return of 8% per year on your lifetime benefit. So if you wait from 62 to 70, the amount that Social Security pays climbs dramatically. (Benefits no longer increase after 70.)

A new study out of Boston College finds that almost 90% of people will be OK at age 70 retiring. That’s due in part to a bigger Social Security chunk, a shorter lifespan to cover in retirement, and people having more focus on saving for retirement the older they get.

Boost your earnings today

What you get from Social Security has everything to do with your 35 highest earning years. So you might consider negotiating a raise or taking on a second job, says U.S. News & World Report.

I can help you on the latter front. My Work from home guide has legitimate ways you can earn some extra money. None of the sites listed on my guide will make you rich, but they will help you supplement your existing income.

Never say ‘never’

As you can see, my general guidance is for you to start taking your Social Security benefits later rather than sooner. But that’s just a general guideline. If you’re 62 and you don’t have a job or the possibility of any future income, then you’d probably want to take Social Security as soon as possible!

Consider buying long-term care insurance

Beyond the Social Security question, another consideration as you age is long term care (LTC) insurance. An LTC policy can be a smart decision for many people. It helps pay for long-term nursing home care or for in-home health care assistance when you get older.

I typically recommend buying LTC insurance in your late 50s or early 60s, but far too few people choose to buy it. Don’t make this mistake. See my Long-term care insurance honor roll for a list of the top companies and more buying tips.

For more money-saving advice for your wallet, visit our Money section!

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