Should We Take Social Security at 62, 66 or 70?

Welcome to the “2-Minute Money Manager,” a short video feature answering money questions submitted by readers and viewers.

Today’s question is about Social Security; specifically, whether you should take Social Security as early as possible (62), as late as possible (70) or somewhere in between.

Watch the following video, and you’ll pick up some valuable info. Or, if you prefer, scroll down to read the full transcript and find out what I said.

You also can learn how to send in a question of your own below.

For more information, check out “10 Things That Can Ding Your Social Security Benefit” and “17 Surprising Facts About Social Security.” You can also go to the search at the top of this page, put in the words “Social Security” and find plenty of information on just about everything relating to this topic.

And if you’d like a plan to help you find the best Social Security claiming strategy, you’ll find it right here. It’s part of our Solutions Center.

Got a question of your own to ask? Scroll down past the transcript.

Don’t want to watch? Here’s what I said in the video

Hello, and welcome to your “2-Minute Money Manager.” I’m your host, Stacy Johnson, and this answer is brought to you by Money Talks News, serving up the best in personal finance news and advice since 1991.

Today’s question comes from Anonymous:

“I’m 59 and my wife is 60. We’re tempted to start Social Security as soon as possible, but we’re reading a lot of different ideas. Some say take it at 62, some say wait till 70 and some say to take at our normal retirement age. Which is right?”

62, 66 or 70?

We’ve published articles about the advantages of taking Social Security as early as possible, as well as the advantages of waiting as long as possible.

Taking your benefits at the earliest possible age, 62, will reduce them by 25% to 30% versus waiting until your full retirement age (between 65 and 67, depending on when you were born). Waiting until age 70 increases them by up to 8% annually for every year you wait after your full retirement age to claim.

If you take your benefits somewhere between these ages, your benefits will be adjusted accordingly.

In theory, you should get the same amount no matter what you do, since you’ll be receiving the reduced amount for more years and the increased amounts for fewer.

That being said, there are situations where it’s better to take benefits early, and others when waiting makes more sense.

Here are some reasons to take Social Security early:

Reasons to claim Social Security early

1. You have a short life expectancy.
2. You need the money.
3. You’ve got minor kids at home who qualify for additional benefits.
4. A higher-earning spouse has a short life expectancy.
5. A low-earning spouse is older than you.

For explanations of these reasons, see “5 Reasons You Should Claim Social Security ASAP.”

Now, here are some reasons not to take Social Security early:

Reasons not to claim Social Security early

1. Claiming early reduces your monthly benefit payment.
2. You might outlive your other retirement income.
3. Working longer can increase your benefit payment.
4. Since your benefit payments will be higher, so will cost of living adjustments (COLAs).
5. You still like your job.

For explanations of these reasons, see “7 Reasons It’s Dumb to Claim Social Security Early.”

What should you do?

As you now know, the answer to the question of when you should begin receiving Social Security benefits isn’t as simple as it may appear.

In general, if you’re happy working and expect a long life, waiting is smart. If you can’t wait to stop working, don’t expect a long life and/or need the money, there is nothing wrong with taking it early. But as I explain in our retirement course, Social Security is a wonderful foundation for your retirement. Here’s why:

• It’s at least partially tax-free.
• It lasts for life.
• It increases with inflation.
• Unlike investments like stocks, it can’t decrease in value.
• It offers a survivor benefit.
• It’s maintenance-free; no specialized knowledge needed.

Last but not least, every year you wait after your full retirement age to claim your benefit increases your monthly income by 8% for life. Eight percent risk-free is a pretty decent return. For that reason, and those listed above, most experts advise waiting, at least if you feel you comfortably can.

Cheap help

There are companies using computer algorithms that promise to maximize your Social Security income. You give them a few simple pieces of information, they send you back a personalized report detailing exactly at what age you and your spouse should file to get the maximum possible benefits over your lifetimes.

Reports like these are especially helpful when two spouses are approaching retirement, since the number of options increases dramatically. And finding the optimum claiming strategy can literally mean tens of thousands in additional income over your lifetimes.

We partner with one of these companies, Social Security Choices. They normally sell their reports for $39.99. But Money Talks News readers can use the coupon code “moneytalks” for a $10 discount. (See our Solutions Center for more financial solutions.)

I got one of these reports and found it both helpful and interesting. You probably will as well. Cheap insurance to make sure you collect every dime you’re entitled to.

Hope that answers your question, anonymous!

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The questions I’m likeliest to answer are those that come from our members. You can learn how to become one here. Questions should also be of interest to other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and I’ve also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

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