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Deciding when to start taking Social Security benefits is one of the biggest questions retirees face. The truth is that the right answer will depend on your unique financial circumstances, but there are some general guidelines that can help you think through the decision.
If you’re looking for specific advice, it may be helpful to work with a financial advisor. They can help you understand your overall financial situation and choose the best Social Security strategy for you. Bankrate’s financial advisor matching tool can help you find an advisor in your area.
Here’s how to think about when to start taking Social Security, and why age 67 could be the sweet spot for many people.
Why start taking Social Security at age 67?
Deciding when to start claiming Social Security depends on a number of factors, and different approaches will make sense for different people. Here are a couple of key questions to consider:
- Do you need the money? If you’re no longer working and you need the cash from Social Security to help meet your spending needs, you might not have much of a choice about when to start claiming benefits. But if you can bridge the gap with your own savings or a pension until you reach full retirement age or older, there can be a real benefit to delaying Social Security.
- What is your life expectancy? This question can be more difficult to answer, but plays a key part in determining when to start taking Social Security. The longer you expect to live, the greater the benefit of delaying benefits. If you have a lower life expectancy, it may make sense to start taking benefits earlier.
The main reason to start taking Social Security at age 67 is that that’s when people born in 1960 or later will have reached full retirement age and will receive 100 percent of their monthly benefit. Yes, you’ll receive a higher benefit for each month you delay up until age 70, but 67 may be a more manageable timeframe for those who will be relying heavily on Social Security during retirement.
As an added potential benefit, age 67 is a nice middle ground for those who are concerned that if they delay payments until age 70, they won’t live long enough to see the full benefit of the increased payments.
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When can you start taking Social Security?
You can start claiming Social Security benefits at age 62, but you’ll receive a reduced amount compared to if you wait until you’ve reached full retirement age.
Full retirement age is when you’ll receive 100 percent of the Social Security benefits that you’ve earned throughout your career. Your full retirement age depends on the year you were born:
| Year of birth | Full retirement age |
|---|---|
| 1943-1954 | 66 |
| 1955-1959 | 66 + 2 months for each year past 1954 |
| 1960 and later | 67 |
| Source: Social Security Administration |
If your full retirement age is 67, and you start claiming benefits at age 62, a monthly benefit of $1,000 would be reduced to $700, according to the Social Security Administration. However, that same benefit will continue to grow if you delay benefits beyond your full retirement age. If you delay until age 70, at which point benefits stop increasing, you’ll receive about 124 percent of the benefit you would have at full retirement age.
Bottom line
Deciding when to start taking Social Security can be a complicated decision. The right answer will be different for people depending on their unique financial position. You’ll want to think about whether you need the money from Social Security to meet spending needs or if you can use savings or other forms of income while you wait to start collecting. Your life expectancy can also influence the ideal age to start taking Social Security.
Age 67 could be a sweet spot for Americans born in 1960 or later to start collecting payments, but working with a financial advisor to determine the best course for you could be helpful.
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