Should You Take Social Security Early?

If you’re nearing retirement, you may be looking into Social Security benefits. You’ve likely heard the advice that you should wait as long as possible to claim them. But there also may be reasons you may want or need to claim earlier.

Every year you delay claiming those benefits (up to age 70) means potentially bigger monthly checks once you do start. And higher monthly benefits over your lifetime can help cover more of your retirement expenses.

Reasons to Take Social Security at 62 vs. Full Retirement Age vs. 70

Let's say you were born in 1960. You could have started drawing Social Security benefits when you reached age 62 in 2022. But if you had, you'd have locked in monthly payments 30% smaller than if you'd decided to wait until your full retirement age (FRA) of 67 in 2027.

And if you delay your benefits until you're 70 in 2030, you could collect 24% more each month than you would have gotten at age 67.

That’s a large difference and highlights how important it is to maximize your benefits. Consider the income you need to maintain your lifestyle and achieve the goals you have set.

Those higher payments may be a pretty convincing argument for many people. But there are times when it may make sense to claim your benefits before age 70, or even before full retirement age.

Here are four situations in which you might want to consider taking Social Security early.

1. You Retired Early and Need the Funds

We often talk to clients about working as long as possible to build a healthy nest egg. But sometimes that isn’t possible. You might have to retire if you become physically unable to do your job, or you could be laid off in a corporate downsizing, for example.

If you’ve retired before your FRA, taking Social Security early may be a necessity to cover your bills. What’s more, it could also let you avoid dipping into your retirement nest egg sooner than you expected. That may give your investments more time to grow.

Early social security payments also can provide consistent income, giving you the peace of mind needed as you settle into a new chapter of life.

2. You Have Health Issues

Today’s longer life expectancies are one reason it can make sense to delay claiming benefits until FRA.

But it can be wise to think carefully about your own health situation. Consider factors such as your family health history, your lifestyle and any existing medical conditions you have. If there’s a possibility you might not have many years in retirement, waiting might not make financial sense.

3. You’ll Be Eligible to Claim Spousal Benefits

If two spouses can each claim Social Security based on individual earnings, the spouse who earned lower lifetime earnings may qualify for spousal benefits. The lower-earning spouse can claim as early as age 62 based on his or her own earnings, but then may qualify to receive up to 50% of the higher earner’s FRA benefit when the higher earner retires.

Here’s an example of how a couple could use this strategy to maximize their benefits. Kathy files at age 62 with a lower benefit than she would have received at FRA. Sam waits until age 70 to claim his own maximized benefits. When he claims, Kathy may be able to receive a spousal benefit that is higher than her own.

4. You’re Working Part-Time or Not Earning Much Money

You can still work in retirement and claim benefits before your FRA, as long as your earnings don’t total more than $22,320 (the limit for 2024). If you make more than that, your benefit will be reduced by $1 for every $2 your income exceeds that limit. Claiming early may make sense if you’re still working but not earning much and need the extra funds.

Note that after you reach FRA, there are no earnings limits, even when you’re claiming benefits.

Weigh the Pros and Cons of Taking Social Security Early

Think carefully before starting Social Security benefits earlier than your FRA. There can be reasons to consider starting benefits early, depending on your situation.

But those advantages may be canceled out when you lock in a lower monthly benefit rate for the rest of retirement. Annual cost-of-living adjustments (COLAs) may help, but it’s important to get all the facts so you can be confident in your decision.

Start Planning Before You File

The Social Security Administration offers a variety of information and calculators online to help you understand your benefits and project monthly benefit amounts. You can also make an appointment to talk through your situation. Once you decide when to claim benefits, ensure you file four months before you plan to start receiving your benefits.

Remember that Social Security benefits are unique. You can’t always exchange notes with your friends and family because everyone's situation will have many differing factors.