# When should I take Social Security?

By James Ustby, CFP®, APMA®. Canonical URL: https://jamesustby.com/retire-when-to-take-social-security

> For most married couples, the higher earner should wait as long as they can toward 70, and the lower earner can claim earlier. Every year you delay past full retirement age adds about 8 percent to the check for life, and the higher earner's check becomes the survivor's check. Single people with average health usually come out ahead waiting too, but the answer depends on health, other income, and whether you need the money to stop working.

## The three ages that matter

You can claim as early as 62 at a permanently reduced amount. Your full retirement age, 66 to 67 depending on birth year, pays the full benefit. Waiting until 70 earns delayed retirement credits of about 8 percent a year on top of that. Claiming at 62 instead of 70 can mean a check that is roughly 75 percent larger for the person who waited, for the rest of their life, adjusted for inflation.

## The survivor angle most people miss

When one spouse dies, the household keeps the larger of the two checks and loses the smaller. So the higher earner's claiming decision is really a decision about the surviving spouse's income for possibly twenty years. Delaying the higher earner's benefit is the cheapest survivor protection most couples will ever buy.

## The breakeven, and why it is not the whole story

If you wait from 62 to 70 and live to about 80, the larger checks catch up to the smaller checks you skipped. Live past that and waiting wins by a widening margin. But breakeven math treats Social Security like an investment, and it is not one. It is inflation-adjusted income you cannot outlive, and the question is how much of that you want in the years when you are least able to earn.

## When claiming early is right

Poor health with a shorter expected life. No other income and no savings to bridge the gap. A lower earner whose own benefit is small and who will eventually step up to a spousal or survivor benefit anyway. In those cases taking it early is correct, and a planner should say so plainly.

## A worked example

| Item | Amount |
|---|---|
| Higher earner, full retirement age benefit | $3,000 a month |
| Claim at 62 (about 30 percent reduction) | about $2,100 a month |
| Claim at 70 (about 24 percent increase over full) | about $3,720 a month |
| Difference, for life, before inflation adjustments | about $1,620 a month |
| Survivor keeps the larger check | $3,720 instead of $2,100 |

The lower earner in this household can claim at full retirement age, or earlier if needed, with far less at stake. The decision that matters is the higher earner's.

## Questions people ask next

### Can I work and collect at the same time?

Yes, but before full retirement age an earnings limit applies and benefits are temporarily withheld above it. The withheld amount is credited back later. After full retirement age there is no limit.

### Is Social Security taxed?

Up to 85 percent of the benefit can be taxable depending on your other income. That is one more reason the withdrawal order from your other accounts matters.

### What if I already claimed early and regret it?

You can withdraw an application within 12 months of claiming and repay the benefits, or you can suspend benefits at full retirement age to earn delayed credits until 70.

## Sources

- [Social Security Administration: Retirement benefits, when to start](https://www.ssa.gov/benefits/retirement/planner/agereduction.html)
- [Social Security Administration: Delayed retirement credits](https://www.ssa.gov/benefits/retirement/planner/delayret.html)
- [Social Security Administration: Survivors benefits](https://www.ssa.gov/benefits/survivors/)

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Author: James Ustby, CFP®, APMA®, Wealth Advisor, LPL Financial, Durham and Chapel Hill, North Carolina. This material is for general information only and is not intended to provide specific advice or recommendations for any individual. Examples are hypothetical and for illustration only. Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA / SIPC. Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP® and CERTIFIED FINANCIAL PLANNER® in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.