Social Security: When to start taking benefits

Social Security provides an important retirement benefit for most Americans. One of the most important decisions people have to make regarding their benefits is when to take them. Social Security lets you begin your payments as early as age 62, as late as age 70, or any time in between. The earlier you start receiving benefits, the less you’ll receive each month, the longer you wait, the larger your monthly payments.

That translates to earning 25-30% less, if you start taking benefits at age 62, rather than waiting until you reach your full or Normal Retirement Age, which is between 65 and 67, depending on the year you were born. Specifically, for every year you delay past 62, up to age 70, your benefits will rise by 6 percent to 8 percent.

When to start taking your Social Security retirement benefits is a tricky question and can have a very large impact. It is a difficult, yet important, number to determine so a well thought out decision is needed. The variables depend on your own personal situation and can take into account many factors including your current cash needs, whether you plan to work in retirement, marital status, other sources of retirement income, future financial obligations as well as many others factors.

The age at which you start receiving benefits can help in retirement and determining the right age can provide the most income possible. There are tools that can help simplify the situation with facts you will need to help maximize your Social Security benefits.

1) Use Online Calculators: Free online calculators offered by groups like the AARP or companies like Social Security Solutions can run the numbers for you and help you figure out your ideal retirement age. The calculator will ask you a series of questions and estimate how much your monthly benefit will be based on different circumstances. Providing information like your marital status and annual income is all it takes to generate a personalized summary report that you can review.

2) Take the Earnings Test: You might have thought about taking your Social Security benefits at the age of 62 but need to keep working to make ends meet. You might want to think again, because the federal government could suspend some of your benefits temporarily if you’re making more than the 2014 exempt amount of $15,480. (This amount will fluctuate as it is indexed to inflation.) For those who have not yet reached their Natural Retirement Age of 66 in 2014, for every $2 you earn over the limit, $1 of benefits will be lost. If you reached your Natural Retirement Age in 2014, the exempt amount is much higher at $40,080 and the loss is $1 for every $3 earned.

3) Read The Social Security Claiming Guide: Written by students at Boston College as part of the Financial Security Project, this book details everything pre-retirees need to know before deciding when to claim their benefits. It includes an FAQ in the final chapter detailing the interaction between work and claiming, risks to consider and special rules for government workers. The Financial Security Project was established at Boston College’s Center For Retirement Research through a grant from the Social Security Administration. You can download the guide for free here.

4) Speak With Your Financial Advisor: In this day and age of new technology and easy access to information, there is still no substitute for human interaction and expertise. If you have any additional questions about Social Security, consulting your financial advisor is the best and most direct way to get the answers you need.

Making the most of your financial situation has never been more important because of all the complex factors you need to consider. This is especially true when planning your retirement so make sure to get the most information as possible.

This information is for educational purposes and should not be considered specific financial, tax or legal advice. Always consult with a qualified advisor regarding your individual circumstances. Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC Registered Investment Adviser.

Brad Zucker, RFC® is the president of Safe Money Advisors, Inc., a Las Vegas-based independent financial advisory firm. He blogs on personal finance every Monday for the RJ. For more information visit or connect with him via Facebook and LinkedIn.