When to Start Taking Social Security Benefits


By Donna Fuscaldo

When it comes to maximizing Social Security benefits, it's all about timing.

"If you look at a married couple, there are 81 different strategies on how to claim Social Security," says David Richmond, founder of Richmond Brothers. "A lot of times people don't know their options."

Filing too early for Social Security can mean getting a smaller check and potentially leaving thousands of dollars on the table, while waiting until Full Retirement Age (FRA) can maximize monthly payments.

Social Security benefits are designed to supplement retirement income, but too often people rely on these benefits as their only cash flow in retirement.

"Most clients assume they should take it right away at 62 and many times that's not the best way to do it," says Richmond. "Social Security went from a safety net to a primary source of income, and that's not what the program was designed for."

To determine when to start collecting benefits, financial experts say you must identify your FRA, which is when you can collect Social Security benefits without penalties. The Social Security website can help calculate this number.

Workers can start collecting at age 62, but doing that could result in as much of a 30% reduction in benefits.

David Hefty, chief executive of Hefty Wealth Partners, says people also need to determine their primary insurance amount (PIA)-the monthly payout from Social Security.

"Your PIA is based on 35 years of your highest earnings. If the end of your career has the highest years, you are doing a good job of increasing your Social Security check," he says.

Knowing how much to can expect each month can help determine when to start collecting.

If the benefits aren't crucial to making ends meet, experts suggest waiting until age 70 to start drawing benefits to maximize check size. Every year past FRA until 70 earns a delayed retirement credit. For example, those born in 1943 or later will get an 8% credit each year collection is delayed, according to the government.

Some people start drawing their benefits as soon as possible and invest it in hopes of making a greater return, but experts caution against this.

"If you wait to 70 you're guaranteed a roughly 8% rate of return," says Richmond. "In today's world, what's growing at 8% guaranteed?"

The decision for single senior citizens on when to collect boils down to whether they need the funds to make ends meet, but for married people, it's a little more complicated.

According to Hefty, two common strategies for married people to get the most from Social Security is the "file and suspend" and "double dip" strategies. Both strategies are only for couples that have other financial means outside Social Security.

The file and suspend strategy helps spouses with a large difference in the size of their benefits, and involves having the person with less benefits filing at 62 while the other spouse can file for benefits and then suspend them. This allows the person who started collecting at age 62 to also get 50% of the spouse's Social Security benefit.

The spouse who delayed gets to maximize the amount he or she will get because each year Social Security isn't collected earns the delayed retirement credit. This strategy enables the couple to start getting some Social Security at age 62 while still getting the most out of the other person's benefits.

The double dip strategy, which is ideal for couples set to get similar benefits, includes taking the spousal benefit and regular benefit at different times. Even if one person's benefit is less, if a couple can live off that, they will end up getting more the longer they wait to collect.

"If you don't need your social security then ideally you should delay it," says Hefty.

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If you wait until 70, you might not get anything! Benefits will have to be cut sometime in the next 8-10 years, and people not yet collecting benefits, will be cut the most.

June 24 2013 at 7:24 PM Report abuse +1 rate up rate down Reply

I will be retiring many years before being eligible for SS. But I am taking for as early as possible for the following reasons.
-I can invest it and do better than wait for a larger SS payment
\-They may change the rules on you, as the pot runs dry.
- You may die earlier than you think
-I have a hard time letting anyone who owes Trillions of dollars (and growing) hold any of my money.


June 21 2013 at 12:16 AM Report abuse +1 rate up rate down Reply

If you are middleclass blow your money and go on welfare when you retire, you will be a lot better off. LBJ started the destruction of the middleclass and now Karl Obama will finish it off. You have to be rich or poor. If you are in the MC you will have to work your ass off to stay even. Hell even a lot of illegals are doing better than the MC. They get every FREE. Housing, medical care, food stamps, $$$$$, and other perks that the MC doesn't get. Then a lot of them also work off the books for cash. I saw over and over in SoCal. At their request I paid most of my yard maintenance workers in cash and quite often they had an illegal on the crew, but I finally had enough when the illegal on "the crew' came back on night and climbed over the wall and stole my VCR. He took a deal, "receiving stolen property." What a joke. I got the VCR back but not the remote, so I had to buy a new VCR. What joke this country has become to illegals. They know the Dems will do anything to keep them here so eventually they can become citizens and live off the dole.

June 20 2013 at 4:59 PM Report abuse +1 rate up rate down Reply
1 reply to biznesspf's comment

but you still employed the yard maintenance workers and paid them cash..did you get a discount??? yea right

June 24 2013 at 5:55 PM Report abuse rate up rate down Reply

Rich people like me and President Obama do not worry about social security darlings.

June 19 2013 at 8:24 PM Report abuse +1 rate up rate down Reply

If you start collecting at age 66 and assume your Social Security check is $2,100 after the Medicare medical deduction that will give you $25,200 per year. Assuming you are still working, you are also getting a pay check from your employment. Now let's say you work until you are 70. You would have collected $126,000 form Social Security for the time your still working until age 70. If you would not have starting collecting Social Security all you would appreciate now is $400.00 more per month or $4,800 per year. So basically you now would have to collect your Social Security increased by $400 per month for 26 1/4 years to equal what you have already collected for the past 5 years. So, what are you waiting for. And here is the best part. Collect at age 66. DO NOT use the money if you are still working. Put it into an interest bearing account (REIT, Mortgae Investments, Etc..) and get a return of anywhere from 10% to 15% and you can appreciate another $30,000 to $40,000 in interest during your 5 year wait periond until you actually retire from the working fileld at age 70. So now how far are you ahead collecting at age 66.. I'm doing it now myself so the figures are tru and accurate.................

June 19 2013 at 5:06 PM Report abuse +1 rate up rate down Reply

If you are a government employee who is working past 62 and will be receiving Social Security in addition to a goverment check, you should check into collecting Social Security before you retire (government employees can do this) because once you retire, depending on the amount of your government check, they will drastically cut the amoung you will receive from Social Security.

June 19 2013 at 2:21 PM Report abuse +1 rate up rate down Reply

Maximizing your return from Social Security is based on how long you think you might be able to draw from the system. In other words, how long do you think you will live. That will be based on a number of variables. How long did your grandparents live? How long did your parents live? What health conditions do you have? Next, you need to determine the break even point for when you would like to start taking Social Security or deferring it until 69-1/2, for full benefit. The break even point for taking benefits at 62 as opposed to taking them at 70 is about 83 years of age. This means that you will get the same amount of money from the system at around 83 years old whether you started at age 62 or if you waited until you were 70 to start. So the big question to answer here is how likely are you to die before you reach 83? If your family history or health is not in favor of reaching 83, then by all means, you should start earlier. You will draw more from the system by taking it earlier, in that case. If on the other hand, your grandparents and parents lived well into their 80's and you are in relatively good health with a good chance of living into your 80's and beyond, then you will be significantly better off waiting until 70 to start taking benefits.

Another argument for starting benefits as soon as you can, is that once I start taking benefits THEY can't reduce the amount that I get. The falacy here is that THEY can do what ever THEY want. What would most likely happen if THEY decided to reduce benefits, is that it would likey be a percentage reduction for everyone (those who were currently receiving benefits and those who would receivie them in the future). The only thing THEY can't take away is the amounts you have already received. But, if you are likely to live beyond 83, you are still better off waiting untlil you are 70 to start taking benefits.

Life is a gamble. If you want to make sure the Social Security system stays solvent and does not fail, then make everyone a participant (including politicans). If politicians had to rely on Social Security like the average Joe, you can bet they would find a way to make it work!

June 19 2013 at 12:14 PM Report abuse rate up rate down Reply

Why fight over it just retire when you think is right for you. Some people are sick with health issues and must retire. Perhaps go on desability if anything. Others are so damn tired working for 30/40+years already , that just getting up in the morning is a trip . If you work for the man like most americans do. If social security is your sole income at retirement and you are not sick and can make it money wise then see if you can retire at 62. Enjoy the rest of your life a bit.. Most americans work until past retirement age however i do not know this to be a fact.. For some lucky people retiring at 62 is a blessing but then, everyone situation is different.

June 19 2013 at 12:08 PM Report abuse rate up rate down Reply

Some in congress and elsewhere have advocated making the earliest age to apply for SS 65 and then full retirement age is 70 ; as a cost savings measure.
So waiting until you are 65 to draw; might get you caught in the age
catch-22 .

June 19 2013 at 11:27 AM Report abuse rate up rate down Reply
John Gabriszeski

What's the difference, if you start at 65 you collect 1,700 a month, 20 k a year wait 5 years to 70 you get 2,100 a month, 25 k a year, 5 k more a year , however you lose 125 k by waiting and at 5 k more a year at 70 you would have to live to 95 to break even and retrieve the 125 you lost, so most likely you won't live to break even, the Gov't saves money!!!

June 19 2013 at 11:27 AM Report abuse rate up rate down Reply
1 reply to John Gabriszeski's comment

you're so right. there's a blizzard of articles like this flying around, but they never mention the years it will take you to make up the money you're not getting while you wait.

If you want to wait, that's fine, but these articles are leaving out important information.

June 19 2013 at 11:39 AM Report abuse +1 rate up rate down Reply