How to Decide When to Claim Social Security

Social Security benefits probably are going to provide a good portion of your income in retirement. That's why it's so important to make sure you understand how these benefits work and when you should claim them. Unfortunately, 91% of older adults have no idea what factors impact whether they'll receive the maximum Social Security benefits, according to a survey conducted by Nationwide.

If you're one of the majority who's not exactly sure when to claim Social Security -- or why the time you claim matters -- read on to find out five key steps to take to decide when to claim your benefits.

1. Determine your full retirement age

Only 26% of pre-retirees know their full retirement age (FRA), according to a Fidelity survey. FRA is the age at which you can retire and get full benefits. Full retirement age varies depending on when you were born.

The chart below shows your full retirement age, depending on your birth year. You need to know this information to understand how the age you claim benefits will affect the monthly income you receive.

Birth Year

Full Retirement Age

1937 or earlier



65 and 2 months


65 and 4 months


65 and 6 months


65 and 8 months


65 and 10 months




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months

1960 and later


2. Calculate your benefits at your desired retirement rate

If you retire at your full retirement age, you'll receive your standard Social Security benefit. You can sign into your Social Security account online to find out what your standard benefit amount will be. You'll need to set up an account if you don't already have one, which means you'll need to provide your Social Security number and other identifying information.

When you've signed in, you'll see your last year's reported earnings along with details about what your benefit will be at FRA.

Your listed earnings -- and the amount your benefit is based on -- include only money on which you paid Social Security tax. If you earned income from interest, dividends, or capital gains, or you have exempt wage income, this income doesn't count.

Your benefits are based on your average annual earnings, adjusted for wage growth, in the 35 years when your income was the highest. If you haven't worked for 35 years by the time you're ready to retire, you'll have some years of $0 income averaged in -- which will lower your overall benefit.

3. Determine how much your benefits would be worth if you retired earlier or later

Once you know your full retirement age and your standard benefit, you can find out what claiming at your desired age will do to your benefits. When you retire before FRA, your monthly benefit is permanently reduced by 5/9 of 1% per month for the first 36 months prior to FRA and by an additional 5/12 of 1% per month if you retire more than 36 months prior to FRA. You start receiving money early, but will receive less every month for life.

If you wait until after FRA, however, benefits will be increased by 2/3 of 1% for each month you wait, up until age 70. The chart below shows how much of a reduction or increase you'd face at different ages if your FRA was 67.


Benefits Change


30% Reduction


25% Reduction


20% Reduction


13.3% Reduction


6.7% Reduction


No Change


8% Increase


16% Increase


24% Increase

You'll want to calculate how long it would take you to break even if you wait for benefits. There's a simple formula to make that calculation.

The key is to determine how much extra you'd receive by claiming early and divide that by the higher monthly benefit you'd get by waiting. The answer to this division problem equals the number of months you'd need to receive the higher benefit to make up for missing benefits by claiming later.

Once you reach the break-even point, you'll receive extra money every month that you otherwise wouldn't have gotten -- so if you think you'll live long enough to at least break even, delaying may be your best bet.

You'll also need to consider whether you can actually afford your lifestyle if you're receiving the lower monthly benefit. Around 25% of current retirees say Social Security benefits are less than expected, and more than half of current and future retirees think Social Security will replace more of their income than it's supposed to. Waiting can give you more money to live on if you'll be relying on Social Security.

4. Explore options such as claiming benefits on a spouse's work record

Before you make your claim for benefits, it makes sense to determine if you'd be better off claiming benefits on a spouse's work record. An audit report issued by the Social Security Administration Office of Inspector General found the Social Security administration underpaid widows and widowers around $131.8 million because widows and widowers weren't informed they could file a restricted application to claim only their survivor's benefits and wait to claim their own benefits until age 70. This is just one of many examples in which Social Security recipients haven't taken full advantage of the opportunity to earn more in total benefits by claiming based on a spouse's earnings.

There are 81 different ways married couples can claim Social Security benefits, so it's important to assess all your options. If you aren't sure what strategy is best, a financial advisor can help.

5. Assess your financial situation

Ideally, you'll have the flexibility of deciding when to claim Social Security benefits so you can maximize the income you receive. Unfortunately, many people end up retiring early because they can't find work and have too little savings, leaving them with no choice but to claim Social Security benefits.

You can avoid being forced into this position by making sure you save as much as possible throughout your career -- ideally investing 15% to 20% of your income in a tax-advantaged retirement account such as a 401(k) or IRA.

If you haven't saved enough, consider working longer to delay claiming benefits if doing so makes the most sense for your situation. Stanford experts recommend waiting until age 70 to claim your Social Security benefits, so if delaying is feasible, this may be your best approach -- unless you have health issues and may not live long enough to break even.

Undoing a mistake may be impossible -- so take these steps first

If you've claimed Social Security benefits too early and it's within a year, you could undo your claim -- but only if you can pay back all your benefits received to date. You also have a few other options if you claimed too early, depending on your age and whether you can work, but it generally is pretty difficult to fix a claiming mistake if you've started your benefits at the wrong time.

To make sure this doesn't happen to you, take these steps and do the research you need to make the most of your Social Security benefits. With Social Security such an important part of your retirement income, taking the time to make the right choice is worth the effort.

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