When Should You Start Taking Your Social Security Benefits? | SB Elder Law

Most advisors recommend waiting as long as possible to begin collecting Social Security benefits. Suze Orman, a contributor to AARP Magazine, makes a strong case for this approach. She argues that with people living longer than ever before, 70 is the new 65. What concerns her the most is not funding the first 10 to 15 years of retirement but rather the 10 to 15 years after that.

What do the numbers have to say?

Of course, every situation is unique. The best time to take Social Security benefits is not the same for everyone. You must consider your particular financial needs, health, post-retirement plans and more in deciding when to take your benefit. Here are some statistics to help you make an informed decision.

The first number you need to know is your full retirement age—the age at which you can collect 100 percent of your benefit. Your full retirement age depends on when you born. For people born in 1937 or earlier, full retirement age is 65. For those born in 1938 and beyond, full retirement age rises gradually to 67.

What happens if you begin taking Social Security before your full retirement age? You can start taking your benefit as early as age 62. According to the Social Security Administration, if your full retirement age is 67, your benefit will be reduced by approximately:

  • 30 percent if you start collecting at 62
  • 25 percent if you start collecting at 63
  • 20 percent if you start collecting at 64
  • 13.3 percent if you start collecting at 65
  • 6.7 percent if you start collecting at 66

Bottom line? If you start collecting early, your retirement benefit will be permanently reduced.

Next time, we’ll talk about what happens when you wait to take your benefits and the concept known as the break-even point.