When is the best age to take your social security? Experts have answers

Social Security accounts for nearly one-third of the income received by people age 65 and older, according to the Social Security Administration. But although 65 has long been a traditional retirement age, it’s not necessarily the best age to collect Social Security.

How Your Age Affects Your Benefits

Your primary insurance amount, or PIA, is the monthly benefit you’ll receive if you begin collecting at full retirement age (FRA), which is 67 for anyone born in or after 1960. However, you’re allowed to start collecting at age 62, in which case the SSA reduces your monthly benefit amount to make up for the extra time you’ll collect. Waiting until after your full retirement age earns you delayed retirement credits, which increases your benefit. So depending on when you start collecting, your monthly benefit could be anywhere from 30% less than your PIA to 24% more than your PIA.

At first glance, holding out for that maximum benefit, which you have to wait until age 70 to receive, seems like the best choice. But some retirees can’t wait that long, and others shouldn’t.

How To Decide the Best Age To Take Social Security

When to start collecting Social Security is a difficult decision, but you can simplify it by weighing the factors that have the biggest impact on your total Social Security earnings.

“The top three factors you should consider when deciding when to start collecting Social Security include how long you plan on continuing to work, your family health history and finally, what your household income needs are,” said Lori Gross, financial and investment advisor at Outlook Financial Center in Troy, Ohio, in an interview with Nifty 50 Plus.

How Long You Plan To Work

If you’re planning to work past age 62, collecting before your full retirement age could hit your benefits with a double whammy because of a limit Social Security imposes on the amount you can earn without a reduction in benefits. The limit for 2025 is $23,400. Every $2 in earnings above that threshold costs you $1 in Social Security benefits.

“Not only will you be taking a permanent reduction in your Social Security, but you will also be paying a portion of the money back to the system, and if you are the higher earning spouse, you’ll be locking in the reduction in the amount of the survivor benefit, should your spouse outlive you,” Gross said.

The threshold and “penalty” change in the year you reach full retirement age. From January of that year until the month before your birthday, you can earn up to $62,160 (2025) with no reduction in benefits. Above that threshold, you lose $1 in Social Security benefits for every $3 you earn. So at the very least, consider waiting until January of the year you turn 67.

Your Family Health History

The longer you wait to collect (until age 70), the more Social Security you could receive — but only if you live long enough.

If a serious health issue or family history of life-limiting disease is likely to result in a shorter-than-average lifespan, collecting earlier might provide the largest total benefit.

In this situation, Thrivent suggests figuring out your break-even point to decide the best age to collect. You can use a break-even calculator like this one from Cross Country Wealth Management to enter your expected benefit amounts at age 62, FRA and age 70 – you can find these amounts by logging into my Social Security and viewing your statement. The calculator will show you at what age you’ll break even based on each scenario.

Household Income Needs

Charles Schwab recommends waiting until at least age 67 if you’ll need your Social Security to make ends meet in retirement. In that case, you might even consider working longer so that you can maximize your benefits by delaying retirement.

In summary

What’s best for one person isn’t best for another, but consider these guidelines:

Collect at age 62 if your life expectancy is limited.
Collect at age 67 if you plan to continue working.
Wait until age 70 if your retirement savings fall short of covering your expenses.

Keep in mind that you don’t have to start collecting at a milestone age. Customize these suggestions to suit your unique financial situation and income goals.

When is the best age to take your social security? Experts have answers

How Your Age Affects Your Benefits