When is the Best Time to Collect Social Security?

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People often wonder when they should start collecting social security benefits. You can start collecting 100% of your social security benefits at your full retirement age, which, if you were born in 1960 or later, is 67. If you wait a little longer, however, you can collect more per year, and if you take your benefits early, you’ll collect less.

At age 68 (assuming you were born in 1960 or later), you can get closer to 108% of your benefit, at age 69, 116%, and at age 70, when the benefit tops out, 124%. You can also take a reduced benefit starting at age 62. If you start collecting as early as possible, you’ll get about 70% of your full benefit. At age 63, you’ll get 75%, at age 64, you’ll get 80%, at age 65, you’ll receive 86.7%, and at age 66, you can collect 93.7%.

So when should you start collecting social security benefits? There are four things to consider when deciding when to take your benefits:

1. Do you need the money now? If you need the money to live at age 62, you’ll need to start collecting it then. That’s when and why most people start taking the benefit. If you don’t need the money to live, however, you’ll need to consider questions 2-4.

2. Do you plan to keep working? If the answer is yes, you don’t want to take your benefits until you at least reach full retirement age. If you take them early and keep working, Social Security will deduct $1 in benefits for every $2 you earn over a certain amount of income.

3. What is your life expectancy? Do you have any health conditions? Do people in your family typically live for a long time, or die young? If you envision a long lifetime, you’ll want to wait to take benefits, because you’ll be losing years of increase in benefits. If you have a short life expectancy, you may want to start taking benefits early at age 62, so you don’t miss out on several years’ worth of benefits only to collect for a few years.

4. How much could you earn by investing the benefits if you took them early? You may not need the money to live on, but if you take the benefit, and then invest the full amount instead of spending it, you could potentially acquire a nest egg that is larger than the amount of extra benefits you would have received by waiting.

There is no one right time to take Social Security benefits, and it will depend on your circumstances. For more information on social security benefits, or for help calculating or applying for yours, visit the Social Security website.