2-Minute Money Manager: Should I Wait to Take Social Security?

Couple Dancing
Photo by Ruslan Guzov / Shutterstock.com

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

Today’s question is about Social Security; specifically, when you should begin your benefits:

  • At the earliest possible age, 62
  • Your regular retirement age, 66 or 67
  • The maximum age, 70

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 “Maximize Your Social Security” and “10 Things That Could Hurt Your Social Security Payments.” 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 need anything from Social Security advice to a better credit card, be sure and visit 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

Welcome to your “2-Minute Money Manager.” I’m your host, Stacy Johnson, and this two-minute answer is brought to you by MoneyTalksNews.com, serving up the best in personal finance news and advice since 1991.

Let’s get to today’s question. It comes to us from Alex:

“I’ve read on your site and others that I should wait until 70 to take Social Security. If you can afford to retire at 62, why not? You’re not getting any younger!”

Well, Alex, you’re absolutely right: I’m 62, and I’m definitely not getting any younger!

I’ve got three things for you.

Thing No. 1: How Social Security works

Let’s start with a quick review of Social Security.

You can take early benefits when you’re 62 and full benefits at your full retirement age, which is typically 66 or 67, depending on when you were born. Or, you can get enhanced retirement benefits if you wait until age 70.

A quick example will bring this into focus. Let’s say you’re eligible for $1,000 per month at full retirement age. If you take it early at age 62, you might get $750 per month. If you wait until age 70, you might get a little over $1,300.

So, now you can see the difference by either taking it early or waiting until the last possible moment, which is age 70.

Thing No. 2: There’s no difference

Here’s something most people don’t realize: Based on average life expectancy, you should receive exactly the same amount of money by taking a lower benefit at age 62, or an enhanced benefit at age 70. You’re not getting penalized by taking it early, and you’re not getting rewarded by taking it late.

Instead, it’s simply based on mortality tables. Over their lifetimes, the person who starts at 62 with a lower payout should receive the same overall amount of money as the person getting larger checks beginning at age 70.

The point is that you’re not being an idiot by starting at 62, and you’re not brilliant because you hold out. Rather, what’s best depends on lots of individual variables, including when you’d like to stop working, what your needs are and your longevity as suggested by your family history. There are also other things to consider when there’s a spouse involved, since one spouse can receive benefits based on the other spouse’s benefit. That’s why it can be a good idea to get some professional Social Security advice.

Thing No. 3: Deciding what to do

Most Americans take Social Security at age 62; very few wait until age 70. There are perfectly good reasons why.

Many people may not be able to wait because they need the money. Or, they may simply feel like retiring at 62. In other words, a lot of people want their money as soon as they can get it, and there is nothing wrong with that.

Personally, I’ll be waiting. Why? One reason is because I’m still working and don’t want my benefits reduced.

If you take benefits before full retirement age, earning money over a specified cap will reduce your benefits by $1 for every $2 you earn. The cap changes as you age, but here’s an example: I’m 62. For every $2 I earn over $17,040 this year, my benefits will be reduced by $1. So, if I took Social Security this year, I’d be leaving a lot of money on the table. (It’s money I’d get back, however, when I start receiving benefits at 70.)

Another reason I’ll most likely wait until 70 is because I’ll probably work until then and won’t need the money. My family history would suggest I’ll live a long life. So, while I can’t know for sure, it’s possible I can wait until 70 and enjoy those fatter checks for many years thereafter.

That’s me. It may not be you.

A few years ago, one of my best friends asked if he should take his pension early, and I said, “Hell, yes.” Why? Because he wasn’t in great shape, health-wise. Both of his parents died young, his siblings died young, and he really needed the money. So, my advice to him was, “Take it as soon as you can get it.”

He died one year later.

The point: For some people it’s a great idea to take Social Security early and for some people it’s a great idea to wait. The reason you’ll often hear people like me say it’s a great idea to wait is simply because you’re going to get more money by waiting. But don’t ever think there’s a single right answer to this question. There isn’t.

Got a question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter, just as you would with any email in your inbox. If you’re not subscribed, fix that right now by clicking here. It’s free, only takes a few seconds, and will get you valuable information every day!

The questions I’m likeliest to answer are those that will interest 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 have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Got any words of wisdom you can offer on today’s question? Share your knowledge and experiences on our Facebook page. And if you find this information useful, please share it!

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
70% of Older Adults Botch This Basic Retirement Question
70% of Older Adults Botch This Basic Retirement Question

Can you answer this fundamental retirement income question?

7 Surprising Benefits of Staying Fit in Retirement
7 Surprising Benefits of Staying Fit in Retirement

Improving your overall physical health is just one reason to stay active after 50.

7 Ways to Shop at Costco Without a Membership
7 Ways to Shop at Costco Without a Membership

You don’t necessarily need to join to get in on the warehouse store’s savings.

What Is Umbrella Insurance, and Do I Need It?
What Is Umbrella Insurance, and Do I Need It?

Umbrella insurance picks up where car and homeowners insurance leaves off. Do you need it? Here’s how to know.

Want a Healthy Retirement? Turn This Device Off
Want a Healthy Retirement? Turn This Device Off

A common behavior becomes increasingly dangerous for those who are 50 or older.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

8 Tips for Retiring Comfortably on Social Security Alone
8 Tips for Retiring Comfortably on Social Security Alone

It’s never too early to start learning how to live well while living on less.

Am I Eligible for My Mother’s Social Security Benefit?
Am I Eligible for My Mother’s Social Security Benefit?

Can an adult daughter tap into her late mother’s benefit?

The Next 5 Groups Who Will Get the COVID-19 Vaccine
The Next 5 Groups Who Will Get the COVID-19 Vaccine

The CDC has unveiled a schedule that likely will determine who gets the next doses.

11 Generic Products You Should Buy at Costco
11 Generic Products You Should Buy at Costco

Not all generics are worthwhile, but these are among the best from Costco’s Kirkland Signature brand.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

This Gas Station Scam Is Victimizing More Drivers
This Gas Station Scam Is Victimizing More Drivers

For the second straight year, a growing number of Americans believe they’ve fallen prey to this scam.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

6 Legal Documents Retirees Need — but Don’t Have
6 Legal Documents Retirees Need — but Don’t Have

Few retirees have all of these documents that are crucial to their golden years — especially during a pandemic.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

Can a Divorced Widow Claim Her First Husband’s Social Security Benefits?
Can a Divorced Widow Claim Her First Husband’s Social Security Benefits?

The rules are complicated when it comes to eligibility for survivors benefits.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

11 Huge Retirement Costs That Are Often Overlooked
11 Huge Retirement Costs That Are Often Overlooked

Does your retirement budget account for all of these costs?

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.