When to Start Social Security: The Decision That Shapes Your Retirement Income

Bob and Linda both turned 62 in 2015. Both had identical earnings histories and the same $2,000 monthly benefit at Full Retirement Age. Bob claimed immediately — he wanted the money now. Linda waited until 70.

Fast forward to today. Bob has collected for ten years, pocketing over $200,000 in benefits. Linda started collecting just five years ago, with lifetime checks totaling about $150,000. On paper, Bob is ahead.

But look closer. Bob receives $1,400 per month — his benefit permanently reduced by 30% for claiming early. Linda receives $2,480 per month — her benefit permanently increased by 24% for waiting until 70. Every single month, Linda collects $1,080 more than Bob.

By age 85, Linda will have collected $60,000 more in lifetime benefits despite starting eight years later. By 90, the gap grows to $125,000.

The decision Bob made in ten minutes at age 62 will cost him over a hundred thousand dollars.

The three ages that matter

Social Security gives you choices, but those choices have permanent consequences. You can claim as early as 62, but your benefit is permanently reduced. You can wait until your Full Retirement Age for your full calculated benefit. Or you can delay until 70 and receive the maximum possible amount for life.

Claiming at 62 means accepting a benefit 25-30% smaller than your FRA amount, depending on your birth year. The reduction is permanent — it doesn't go away when you reach FRA. If your FRA benefit is $2,000, claiming at 62 locks you into roughly $1,400 for life.

Waiting until FRA (currently 66-67 for most retirees) gets you 100% of your calculated benefit. This is what your Social Security statement shows as your primary insurance amount.

Delaying past FRA earns delayed retirement credits — roughly 8% per year until age 70. That adds up to 24-32% more than your FRA amount. The same $2,000 FRA benefit becomes approximately $2,480 at age 70.

After 70, there's no further increase. Delaying beyond 70 simply means missing checks you could have collected.

The math most people miss

Early claiming seems obviously smart at first glance. More years of collecting. Money in hand now. Bird in hand, right?

The math tells a different story when you extend it past the early years.

Consider Sarah, with a $2,500 FRA benefit. At 62, she'd receive $1,750 monthly. At 70, she'd receive $3,100 monthly. The difference is $1,350 per month, or $16,200 per year, for the rest of her life.

If Sarah claims at 62, she collects $21,000 per year starting immediately. If she waits until 70, she collects $37,200 per year starting eight years later. The breakeven point — where total lifetime benefits become equal — falls around age 80.

After 80, waiting wins. And the longer Sarah lives past 80, the more dramatically waiting pays off.

At 85: claiming at 62 yields $483,000 lifetime; claiming at 70 yields $558,000 lifetime. That's $75,000 more for waiting.

At 90: claiming at 62 yields $588,000 lifetime; claiming at 70 yields $744,000 lifetime. That's $156,000 more for waiting.

The numbers shift with inflation adjustments and individual circumstances, but the pattern holds. Early claiming wins if you die young. Delayed claiming wins if you live long. And most people underestimate how long they'll live.

The spousal calculation that changes everything

For married couples, the claiming decision extends beyond individual benefits. It affects what the surviving spouse will receive for years or decades after the first death.

When one spouse dies, the survivor doesn't keep both benefits. They receive the higher of the two. If Tom receives $3,200 per month and his wife Margaret receives $1,600, and Tom dies first, Margaret gets Tom's $3,200. Her own $1,600 stops.

This creates a powerful argument for the higher earner to delay claiming. If Tom claimed at 62 and receives $2,240 (reduced), that's what Margaret gets as a survivor. If Tom waited until 70 and receives $3,968 (maximum), that's Margaret's survivor benefit — $1,728 more per month, potentially for 15-20 years of widowhood.

Over 15 years, that difference totals over $300,000 in additional income for the surviving spouse.

The strategic implication: in many couples, the lower earner can claim early while the higher earner delays. This provides household income during the waiting years while maximizing the benefit that will support the surviving spouse.

Tom and Margaret ran these numbers. Margaret claimed at 63 — her smaller benefit provided income while they waited. Tom delayed until 70 — maximizing both his lifetime income and Margaret's eventual survivor benefit. The combination optimized their household income across both their lifetimes.

Working while collecting: the earnings test

If you claim before FRA while still working, the earnings test reduces your benefits temporarily.

In 2025, if you earn more than $22,320 while receiving benefits before FRA, Social Security withholds $1 for every $2 you earn above that threshold. In the year you reach FRA, the threshold rises to $59,520, and the withholding drops to $1 for every $3 earned. After reaching FRA, there's no earnings test — earn whatever you want without reduction.

The good news: withheld benefits aren't lost. After you reach FRA, Social Security recalculates your benefit to credit you for the months benefits were withheld. You eventually receive most of what was taken, spread over your remaining lifetime.

But the earnings test creates cash flow complications. If you're working substantially and would lose significant benefits to withholding, it often makes sense to delay claiming until your earnings drop or you reach FRA.

The tax dimension

Social Security benefits can be taxable — up to 85% of your benefits may be included in taxable income, depending on your other income.

The calculation uses "combined income": your adjusted gross income plus nontaxable interest plus half your Social Security benefits. For married couples filing jointly, if combined income exceeds $44,000, up to 85% of benefits are taxable.

This creates an interesting interaction with claiming age. Larger benefits (from delayed claiming) mean more potentially taxable income. But larger benefits also mean you might need to withdraw less from taxable retirement accounts, which could reduce your combined income.

The optimal strategy depends on your complete income picture. Someone with large Traditional IRA balances might face heavy Social Security taxation regardless of claiming age. Someone with mostly Roth savings might keep combined income low enough that benefits stay largely tax-free.

When to claim early

Despite the math favoring delay, early claiming makes sense in specific situations.

Serious health concerns that limit life expectancy change the calculation fundamentally. If you have reason to believe you won't reach the breakeven age, claiming early makes financial sense.

Immediate financial need sometimes forces the decision. If you can't cover expenses without Social Security income, waiting isn't an option. Survival trumps optimization.

Enabling delayed claiming for a spouse can be strategic. The lower earner claims early, providing household income while the higher earner delays to maximize survivor benefits.

Investing the benefits with consistent returns exceeding 6-7% annually theoretically beats delayed claiming — but this requires both the discipline to actually invest the benefits and the risk tolerance to accept that markets don't always cooperate.

When to wait

The math favors waiting in most scenarios where you can afford to do so.

Good health and family longevity shift the odds. If your parents lived into their 90s and you have no serious health conditions, you're statistically likely to collect benefits for many years beyond the breakeven point.

Higher earner in a marriage should generally delay to maximize survivor benefits. The decision protects your spouse for potentially decades of widowhood.

Other income sources that can cover expenses during the waiting years make delay feasible. Pensions, savings, part-time work, or a spouse's income can bridge the gap.

Desire for guaranteed, inflation-adjusted income argues for maximizing Social Security. Private alternatives to Social Security's inflation-protected, lifetime income stream are expensive. Delaying is essentially purchasing more of this valuable insurance.

The decision framework

There's no universal right answer. The optimal claiming age depends on your health, financial situation, family circumstances, and risk tolerance.

If you're single and in poor health, early claiming probably makes sense. You'll collect benefits for fewer years, and the breakeven calculation doesn't favor waiting.

If you're single and healthy, delay favors you. The longer you expect to live, the more the larger monthly benefit compounds into greater lifetime income.

If you're married, the higher earner should almost always delay unless health concerns argue otherwise. The survivor benefit protection is too valuable to forfeit.

If you're married and both spouses have similar earnings, a split strategy often works well — one claims early for income, one delays for maximum benefit.

If you're unsure about longevity, delaying provides insurance against the expensive scenario (living long) rather than optimizing for the cheaper scenario (dying early). Outliving your money is a bigger problem than dying with unused Social Security credits.

Bob wishes he'd thought harder about his decision in 2015. At the time, claiming early felt obvious. Ten years later, watching Linda's checks arrive at nearly double his amount, the math is painfully clear.

"I can't go back and change it," Bob says. "But I tell everyone younger than me: run the numbers. Really run them. Don't just take the money because you can."

Need personalized guidance on your Social Security claiming strategy? Connect with a retirement advisor who specializes in optimizing Social Security benefits.