When Should You Start Social Security Retirement Benefits?

For many years, financial professionals have recommended that most people strive to delay taking Social Security benefits until age 70. The reason: Every year you delay starting benefits increases your eventual monthly check by 8%, in most cases. If you get your full retirement benefits at age 66, waiting until you are 70 will increase your monthly benefit by 32%.

Should You Delay Benefits?

If you have significant health problems that are likely to shorten your life expectancy, take benefits early. But, if you don't need Social Security income to live on, the conventional wisdom to delay starting Social Security benefits still makes sense for most people.

There are Multiple Reasons to Delay Benefits:

• Social Security benefits are guaranteed by the U.S. government. Once your Social Security benefits are locked in, they aren't subject to market risk.


• Social Security benefits have a built-in inflation adjustment. The government grants a cost-of-living adjustment (COLA) each year, increasing Social Security benefits. Those COLA adjustments start at age 62, and you benefit from them whether or not you claim benefits at that time.


• The 8% credit you can earn each year by waiting is significantly higher than current interest rates. It could be difficult for you to get that kind of return from ordinary investments – and it wouldn't be guaranteed.

Remember, there's no benefit to putting off benefits after age 70, when your benefit amount is maxed out. If you decide to retire at age 68 instead, you'll retain the 8% annual increase to date, however it accrues monthly, so your birthday affects the final amount.

Alternatively, if you start Social Security retirement benefits at age 62, the earliest age allowed, your checks will be 27% – 30% less than the maximum amount if you were born in 1960 or later.

Deciding when to start taking Social Security retirement benefits is a big decision that cannot be changed, so consult your financial and tax professionals in advance.

*Those born prior to 1943 may receive a slightly lower benefit by waiting. https://www.ssa.gov/ planners/retire/delayret.html