What to Consider Before Filing for Social Security Early
When to take Social Security: It’s THE question for people as they approach retirement, and there’s lots to think about.


One of the most important decisions you’ll make when planning your retirement is when to begin taking your Social Security payments. This is important to me because I have seen how making the wrong filing decision can have long-term consequences.
Though Americans are starting to recognize the financial benefits of waiting for their full retirement age (sometime between 66 and 67, depending on your birth year), many don’t hold off that long because you can take them as early as 62, though with reduced benefits.
What’s the rush?
Clients and prospective clients tell me every day that they plan to take their benefits as soon as possible. Some say they’ve been paying into the fund for years, and they intend to get their money back ASAP. Others worry Social Security will soon go away, and they want to be paid while they can.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Then there are those who expected to work until they were 65 or 66, but then they’re “downsized” in their early 60s, find it difficult to find another job and decide they need the steady income Social Security offers.
What are the consequences?
I see why filing may seem the thing to do in these situations, but I always want my clients to understand the options before they file. There are three glaring consequences that they must take under consideration:
- Lower payments for life.
- Earnings limitations on future job possibilities.
- A potentially big income hit on your spouse.
Usually, they’re aware that they’ll get more money if they wait, but they might not know how much more.
Their monthly payments will be about 30% percent higher at their full retirement age than it will be if they file at 62. And they’ll get even more — 8% per year after their full retirement age (FRA) — if they wait until they turn 70.
That’s all the incentive some people need to hang on a few years longer. But there are other things to consider, as well.
The guy who loses his job at 62 and perhaps prematurely takes his benefits when he can’t get another? If he eventually finds work, he’ll have to deal with an earnings threshold ($16,920 in 2017 if filing prior to the person’s FRA) that restricts how much he can make; if he makes more, Social Security will withhold $1 in benefits for every $2 he makes over that limit.
There’s also his spouse to consider in all this. If he’s been the higher earner in the family all these years and he takes his benefits at 62, he’s greatly reducing the amount his wife will receive if she outlives him.
Understanding all of your Social Security options, and most important, how Social Security fits into your overall retirement income and distribution plan, is essential to making the best-educated decision on when to take your benefits.
A 4-part action plan toward an informed decision
Here is part of how we help clients see how Social Security fits into their overall income plan. First, we talk to clients about their income needs and break them down into two main categories: keeping the lights on and lifestyle. My experience with clients has been that the first five to seven years of retirement are the most active, regarding lifestyle. Meaning, the extras like travel, hobbies and, of course, the grandkids create more spending in the early retirement years than later.
Second, we review their income streams. Where’s the money going to come from to fulfill those needs? Do they have a pension? Rental income? Retirement accounts? Brokerage accounts, maybe a Roth IRA? And then, of course, Social Security.
Third, when distributions start from those various sources to fulfill their needs, how does the tax return look? And we don’t look at just this year, but at future years, too. Then we analyze what happens if more money is taken from one source, say, a retirement account, while holding off on Social Security, letting Social Security grow and adding it back in later at a greater amount. Does this create a lower tax obligation on the retirement account distribution? This also can help lower the required minimum distributions (RMD) on those retirement accounts at the age of 70½ and beyond while achieving the maximum amount of Social Security.
Last, and I believe a very important part, is to create a surviving-spouse scenario, removing all income associated with the other spouse (Social Security, pension, etc.). How does that change the income for the surviving spouse? This can shed light on how important delaying at least one spouse’s Social Security can be for the surviving spouse.
The bottom line
These are just some of the things I believe people should be thinking about before deciding when to file for Social Security benefits, especially if they don’t have a traditional pension — because that means Social Security is their pension. The choices they make about how and when to take Social Security won’t affect just them, they will impact their family and their legacy.
Before you decide to rush down and file for your benefits — whether it’s because you want the money, or you feel you need the money or you listened to what I believe are overblown media reports and you’re worried the fund will run out of money or the government will take Social Security away — please take the time consider all your options.
By reviewing multiple holistic scenarios, you’ll be better prepared to make a calm, confident and informed decision about this very important part of your retirement future.
Kim Franke-Folstad contributed to this article.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Matt Hausman is the founder and president of Old Security Trust Corp. and Old Security Group, a Registered Investment Advisory Firm. He focuses on helping clients recognize when they are unknowingly and unnecessarily transferring away their wealth, and believes in helping empower consumers through effective information on financial strategies. Matt has passed the Series 65 exam and holds life, health and title licenses in multiple states.
-
The Five Social Security Blind Spots Retirees Often Miss
Understand how benefits work before applying, so you don’t lose money for which you qualify.
-
Stock Market Today: S&P 500, Nasdaq Hit New Highs After Vietnam Trade Deal
Ahead of a key July 9 tariff deadline, President Trump said the U.S. has reached a trade deal with Vietnam.
-
Social Security's First Beneficiary Lived to Be 100: Will You?
Ida May Fuller, Social Security's first beneficiary, retired in 1939 and died in 1975. Today, we should all be planning for a retirement that's as long as Ida's.
-
An Investment Strategist Demystifies Direct Indexing: Is It for You?
You've heard of mutual funds and ETFs, but direct indexing may be a new concept ... one that could offer greater flexibility and possible tax savings.
-
Q2 2025 Post-Mortem: Rebound, Risks and Generational Shifts
As the third quarter gets underway, here are some takeaways from the market's second-quarter performance to consider as you make investment decisions.
-
Why Homeowners Should Beware of Tangled Titles
If you're planning to pass down property to your heirs, a 'tangled title' can complicate things. The good news is it can be avoided. Here's how.
-
A Cautionary Tale: Why Older Adults Should Think Twice About Being Landlords
Becoming a landlord late in life can be a risky venture because of potential health issues, cognitive challenges and susceptibility to financial exploitation.
-
Home Equity Evolution: A Fresh Approach to Funding Life's Biggest Needs
Homeowners leverage their home equity through various strategies, such as HELOCs or reverse mortgages. A newer option: Shared equity models. How do those work, and what are the pros and cons?
-
Eight Tips From a Financial Caddie: How to Keep Your Retirement on the Fairway
Think of your financial adviser as a golf caddie — giving you the advice you need to nail the retirement course, avoiding financial bunkers and bogeys.
-
Just Sold Your Business? Avoid These Five Hasty Moves
If you've exited your business, financial advice is likely to be flooding in from all quarters. But wait until the dust settles before making any big moves.