Believe it or not, the timing of when you decide to claim your Social Security retirement benefits can have a significant impact on how much you receive over your lifetime.
Most people can claim their Social Security retirement benefit between age 62 and 70, with an exception for widowed spouses who can file as early as age 60.
Full Retirement Age, or FRA, is between age 66 and 67, depending on the year you were born. This is when you are entitled to 100% of your Primary Insurance Amount. Claiming your benefits before your FRA will reduce your benefit by up to 30%.
If you wait to file after your full retirement age, you’ll earn delayed credits, which increase your benefit by 8% each year up to age 70. Once you file, you will receive monthly checks for the rest of your life, which will increase with inflation each year.
Everyone’s financial situation is unique, so while we can’t give broad suggestions that are optimal for everyone, we will point out some crucial factors you should consider to help you make an informed decision on when to file for your retirement benefits.
Work Status:
You’ll definitely want to consider your work status. If you haven’t reached Full Retirement Age and are still working, your benefit will be reduced by $1 for every $2 you make over the earnings limit. In 2025, the limit is $23,420.
Only your wages count toward the limit. Other non-wage earnings, such as pensions, annuities, investment interest, and capital gains do not count toward the limit. If you are still working in the same year you hit your FRA, your benefit will be reduced by $1 for every $3 you make over the higher $62,160 limit.
If you fall into this category, you may want to consider waiting to file until you are done working or reach your full retirement age.
Life Expectancy:
One of the most impactful factors in deciding when to take Social Security is your life expectancy.
The longer you live, the more income you’ll collect from Social Security checks. By delaying your Social Security filing, you can earn delayed credits for a higher monthly payment once you file, but you are forgoing payments early on. Generally, the breakeven age where the higher checks offset the forgone income early on, is some point in your early 80s.
Obviously, no one knows how long they will live, but considering your current health and family history can help you better understand your odds of reaching specific ages, which can help you determine when to file.
Marital Situation:
Your marital situation can also play an important role in determining when to file.
Social Security Spousal Benefits allow you to claim half of your spouse's benefit if you do not qualify for personal benefits or if your benefit is less than half of your spouse’s benefit at FRA. Unlike personal benefits, spousal benefits do not get delayed credits past your Full Retirement Age, so filing at your FRA usually makes the most sense, as opposed to waiting until 70.
Another reason your marital situation is important is that if the spouse with the higher benefit passes away, the surviving spouse will receive the deceased spouse's benefit amount. This creates unique situations when there is a large age gap between spouses, or if the higher earner has a terminal illness or significantly shorter life expectancy.
Low Withdrawal Rate:
Understanding how much money you’ll actually need to pull from your retirement portfolio should be taken into consideration as well.
If you only need to pull a small percentage of your nest egg because you have significant assets or have other forms of income, such as a pension, you may want to wait as long as possible to lock in a higher lifetime benefit.
Market Conditions:
Lastly, the current state of financial markets should be relatively low on the list of things to consider, but should be factored in if conditions are extreme.
For example, if the market is in a deep drawdown, you may want to think about filing for benefits, as it would allow you to reduce the amount you need to withdraw from your portfolio each month.
By taking less from your portfolio when it is down, you leave more of it intact to benefit from a recovery when markets bounce back.
Given how many factors you need to consider when deciding when to file, we recommend you talk to a financial professional for advice. There are a handful of tools available to advisors that allow you to input various assumptions to calculate the optimal time to file.
If you’d like to run the numbers for your situation or have more general questions, feel free to reach out at nick@slaytonlewis.com. Thank you.