5 Strategies for Deciding When to File For Social Security

A senior couple looking off into the distance.

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published 22 March 2024

Waiting until age 70 to file for Social Security retirement benefits is one of the most effective ways to reduce the risk that you’ll run out of money in your later years. But in some instances, filing for benefits at your full retirement age (FRA) or even earlier could provide more financial security for you and your family. And some retirees may find that filing early will significantly improve their quality of life.

If you’re approaching retirement, or you’ve retired but haven’t filed for Social Security, you’ve no doubt heard about the advantages of waiting until age 70 to claim your benefits. You can file for benefits as early as age 62, but your monthly payout will be as much as 30% lower than the amount you’ll receive if you wait until your full retirement age. (FRA is 66 if you were born between 1943 and 1954; it gradually rises to 67 for younger people.) Your annual cost-of-living adjustment will be lower, too, because the COLA is based on the amount of your benefit.

If you delay starting benefits until after you reach full retirement age, you’ll receive an 8% delayed-retirement credit for each year you postpone claiming benefits from that age until age 70. Workers who reach full retirement age at 67, for example, would receive a 24% increase in benefits by waiting until age 70 to file. (At www.ssa.gov/OACT/quickcalc, Social Security provides a calculator you can use to estimate your benefits based on the year you plan to retire.) Yet despite those advantages, less than 10% of retirees wait until age 70 to claim benefits, and about 30% claim them at 62, according to the Congressional Research Service.

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In some cases, individuals don’t have the luxury of waiting until full retirement age — let alone until age 70 — to file for benefits. Although nearly 70% of workers expect to retire at age 65 or older, in reality, only 34% of retirees managed to work that long, according to research by J.P. Morgan Asset Management. Among those who retired earlier than planned, nearly one-third cited health problems or disabilities, 23% cited corporate downsizing, and 13% said they retired early to take care of a spouse or other family member. When that happens, claiming Social Security — even with the haircut — can provide much-needed financial stability, says Ashton Lawrence, a certified financial planner in Greenville, S.C. “It’s crucial to balance short-term financial needs with the long-term benefits of delayed claiming.”

Other retirees file for Social Security as early as 62 because they don’t expect to live long enough to benefit by waiting. Niv Persaud, a CFP with Transition Planning & Guidance in Atlanta, says one of her clients is in remission after a cancer diagnosis and doesn’t have a family history of longevity. Although she understood that waiting until age 70 would increase the size of her benefits, “given her on-going health issues and family history, she preferred claiming her benefit early,” Persaud says.

As you contemplate claiming strategies, you may have heard about the break-even point, which is the age at which the value of claiming larger benefits for a shorter period — starting at age 70, for example — outweighs the benefits of claiming a smaller payout for a longer period — say, by starting at age 62. Estimates of break-even points vary, but an analysis by J.P. Morgan Asset Management recommends claiming benefits as early as 62 if you don’t expect to live past 77. If you expect to live beyond 77, postpone benefits until at least your full retirement age, and if you expect to live beyond age 81, consider waiting until age 70 to file for benefits, the analysis suggests. Married couples should factor in the value of survivor benefits, which we’ll discuss later in this story.

Most Americans will live past age 77, and many will live into their eighties or beyond. According to the Social Security Administration, a 62-year-old man has a 71% chance of living to at least age 77 and a 58% chance of living to age 81; a 62-year-old woman has an 80% chance of living to at least 77 and a 69% chance of living to 81. And even if your parents died in their fifties or sixties, advances in diagnosis and treatment of common diseases, along with differences in lifestyle, could enable you to live much longer than they did, Persaud says.

Even if you’ve concluded that delaying benefits until age 70 is in your best interest, covering expenses in the interim can be a challenge. But if you’re married, there’s a strategy you can use to bridge the gap. Consider having the lower-earning spouse file for benefits at full retirement age, or even as early as 62 if necessary. Use the lower-earning spouse’s benefits, along with income from other sources, to pay expenses while the higher earner’s benefits — which will get the biggest boost from delayed-retirement credits — continue to grow until the higher earner turns 70.

Marguerita Cheng, a CFP with Blue Ocean Global Wealth in Potomac, Md., worked with a married couple who wanted to provide financial assistance to an aging parent and a disabled sibling. They elected to have the wife, who was the lower earner, file for benefits before she reaches full retirement age, while the husband will wait to file for benefits until at least his full retirement age or possibly age 70, she says. Having access to funds they can use to help family members provides them with peace of mind, Cheng says.

This strategy could also enable married couples to get the most out of their survivor benefits. A surviving spouse who has reached full retirement age is eligible for up to 100% of the deceased spouse’s benefit or, if the deceased spouse had not yet filed for benefits, 100% of the amount the deceased spouse would have received had he or she filed. For that reason, it may make sense for the higher earner to delay benefits until age 70, even if he or she doesn’t expect to live past 81, in order to preserve the maximum benefit for the surviving spouse.

While having the higher earner wait until age 70 to apply for Social Security will increase survivor benefits, it won’t affect spousal benefits, which allow the lower-earning spouse to receive benefits based on the higher earner’s work record. The most a spouse can receive in spousal benefits is 50% of the higher earner’s primary insurance amount, which is the amount that spouse is entitled to at full retirement age.

If you’re a widow or widower, you can file for survivor benefits as early as age 60. But in that case, the benefits will be reduced by about 29%. If your own benefit will be less than the survivor’s benefit, a better strategy is to file for your own benefits at age 62 and switch to survivor benefits when you reach full retirement age, which is when those benefits reach their maximum, says Michelle Gessner, a CFP with Gessner Wealth Strategies in Houston. (Survivor benefits aren’t eligible for delayed-retirement credits, so there’s no upside to waiting until age 70.)

“Taking your own benefit at 62 doesn’t preclude the survivor’s benefit from growing in the background, which is typically not the case with other benefits offered through Social Security,” she says. Conversely, if your own benefit will be larger, you could claim survivor benefits as early as 60 and allow your own benefits — which are eligible for delayed credits — to grow until you reach age 70, at which point you could switch to your own benefits.

If you’re divorced, you’re also eligible for survivor benefits as early as age 60 — or as early as 50 if you have a disability — if the marriage lasted at least 10 years and you didn’t remarry before age 60. (If you remarry after you turn 60, it won’t affect survivor benefits.) As is the case with surviving widows and widowers who aren’t divorced, you can file for your own benefits early and allow your survivor benefits to grow, or vice versa.

If you’re eligible for Social Security and have minor children, they may also be eligible for benefits, but only if you’re receiving benefits. To qualify for benefits, your child (or children) must be younger than 18 (or 19 if still in high school). Unless a child is disabled, benefits will stop when he or she turns 18 — or, if the child is in high school, benefits will last until the child graduates or two months after the child turns 19, whichever comes first. Dependent grandchildren are also eligible for benefits. Minor children can receive up to half of the amount the parent will receive at full retirement age. In the case of multiple children, Social Security caps the amount a family can receive at 150% to 188% of the parent’s FRA benefit.

Benefits paid to a minor child won’t reduce the amount you’re eligible to receive when you file. However, if you start benefits early — at age 62, for example — so that your children will receive payments, your benefits will still be permanently reduced. For that reason, Lawrence says, you should weigh your family’s immediate financial needs against the increase in your benefits you’d receive by filing later.

While preserving survivor benefits is an important consideration for married retirees, it’s not an issue for singles. If you don’t need the income, it still makes sense to wait until you reach full retirement age to file, but waiting until age 70 may be less compelling. One of Persaud’s single clients decided to claim at age 67 after learning that she would receive only about $100 a month in additional benefits if she wanted until age 70. Filing for benefits helped alleviate stress about her finances, “and $100 wasn’t going to make or break her,” Persaud says.

Although Social Security will represent a significant and reliable slice of your retirement income, you’ll probably have other financial resources, such as IRAs and 401(k) plans, taxable brokerage accounts, and, if you’re lucky, a defined-benefit pension plan. With that in mind, reviewing Social Security as a component of your overall retirement portfolio can help you determine the optimal time to file for benefits.

For example, if you’re forced to retire in a year that your portfolio has dropped 15% to 20% — and you don’t have other sources of funds — filing for Social Security could enable you to avoid taking withdrawals that would lock in those losses, says Andrew Herzog, a CFP with the Watchman Group in Plano, Texas. Though filing early will reduce your benefits, it could also provide enough time for your portfolio to recover before you need to take withdrawals, he says.

Some retirees believe returns on their portfolios could outperform the return they’ll receive by delaying Social Security — especially if they reinvest their benefits. However, Social Security’s annual COLA, combined with the guaranteed 8% annual return for delayed-retirement benefits, is a high hurdle to overcome. Outperforming that return would require an aggressive investment strategy and a high tolerance for risk, according to a recent paper by Wade Pfau and Steve Parrish in the Journal of Financial Planning. Even then, the authors conclude that based on historical data, it’s uncommon for investment returns to beat the implied benefit of delaying Social Security for long-lived retirees.

Finally, if you’re determined to leave a legacy, filing for benefits before age 70, or even full retirement age, could reduce the amount you’ll need to withdraw from your savings, thus increasing the amount you’ll be able to leave to your heirs. Persaud says her client who filed early because of a cancer diagnosis also wants to provide an inheritance for her adult son, and claiming Social Security will allow her to preserve those assets.

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.