When Is The Best Time To Start Collecting Social Security Payments?

Social security card and American money dollar bills close up concept
Social security card and American money dollar bills close up concept

For many years, age 65 was considered a typical retirement age. However, most younger Americans will have to wait longer to collect full retirement benefits now because the social security retirement age keeps increasing. People who were born after 1937 need to wait until age 66 and beyond for full benefits.

The government also allows qualified recipients to choose to begin their payments as early as age 62 or as late as age 70. Obviously, the earlier that payments start, the lower each payment will be. This can make it difficult for some retirees to figure out the best time to begin collecting their social security income.

Is it Better To Take Social Security Payments Earlier or Later?

This offers a rough estimate of the differences between collecting social security at different times for an individual who qualified for full retirement benefits at age 66:

  • At 62, estimate that payments will be about 75 percent of what they would be at full retirement.
  • At age 65, the payments would be about 93 percent of full retirement benefits.
  • Beyond full retirement age, figure on an increase of about eight percent for each additional year.

The government bases the size of payments upon earnings and actuarial tables with the life expectancy for average people. Both of these things might factor into a decision about the best way to time social security payments. By delaying payments, some people might have a chance to earn more money and qualify for larger checks both because they waited and because they have a higher income to use to qualify.

On the other hand, people who take their checks early will be sure to receive more total checks than they would if they had waited. Since nobody can predict how long he or she will live or exactly how much money might be made, the decision might be based upon a number of uncertainties. There is no way for most people to know for sure which choice will result in a greater amount of total payments.

Calculating the Best Time to Collect Social Security

Because there are so many unknowns, figuring out when to begin collecting social security might seem a little bit like gambling. The right decision could depend upon savings, income, and even health. A 62-year-old might decide to take smaller payments because the extra income would help maintain a comfortable lifestyle. A healthy 69-year-old might decide to wait another year because the money isn’t needed at the moment. This is a personal choice that’s different for people with different circumstances.

The Social Security Administration does offer some free retirement calculators that can help people figure out how their own payments would be affected by a decision to take payments early or wait until later. These calculators are published at SSA.gov.