FEDweek

Winning the Waiting Game

You can collect Social Security retirement benefits as early as age 62. At that age, your monthly checks will be relatively small.

The longer you wait to start collecting, the larger your monthly checks will be. That’s true until age 70, when the “delayed retirement credits” end. If you wait until age 70, your Social Security check might be 70 percent higher than at age 62.

Which tactic makes the most sense? If you are 62, not working, and need the money, start then. Otherwise, it might pay to wait, especially if you’re in good health. The longer you live, the greater the chance that waiting was a smart move.

Although individual circumstance differ, the “breakeven” point is usually between 15 and 23 years. That’s the time it will take for the extra cash you receive by waiting outweighs the cash you would have received by starting early.

Therefore, if you reasonably expect to live beyond age 85, wait until you’re 70 (or as close to it as possible) before starting to collect Social Security. At age 86, 87, 88, etc., you’ll receive a much larger paycheck than you would have if you had started sooner.

Married couples should realize that a surviving spouse may collect the Social Security benefit of the first spouse to die. Thus, if the spouse with the higher earnings is significantly older than the other spouse, that older spouse probably will benefit the younger spouse by waiting until age 70 to start getting Social Security checks.