Under current law, you can get a full retirement benefit from Social Security at age 65, assuming you are otherwise eligible. That age will gradually increase to 67 in subsequent years. You can start benefits as early as 62, although a reduction from your “full” retirement age rate will apply. Alternatively, you might wait as late as 70 to begin, for a monthly benefit that will be increased by 30 percent or more over your “full” retirement age rate. (Note: Your own earned benefit or a spousal or survivor benefit might be subject to certain reductions if you also draw an annuity from a retirement program that doesn’t include Social Security, such as the federal government’s Civil Service Retirement System; many individuals covered by such systems stand to receive no Social Security benefits.) When should you start? Here are the factors to consider:
- Financial need. If you need the money, take your benefits as early as possible.
- Work plans. Between ages 62 and 64, $1 of retirement benefits are lost for every $2 earned over a threshold amount, $11,280, in 2002. Therefore, if you have substantial earned income you should wait at least until your full retirement age.
- Life expectancy. If you reasonably can expect to live for many years, based on family history and your own health, wait. You’ll receive the highest benefit and you’ll keep receiving it for many years. If you expect to live beyond 83 or 84, deferring benefits may be a good choice. That’s especially true for people born in 1943 or later because they’ll get a delayed retirement credit of 8 percent per year, for each year they wait for benefits beyond their full retirement age.
- Marital status. You should wait as long as possible for your benefits if you’re married to a younger spouse who has not earned substantial amounts. A worker who defers benefits provides greater income for a surviving spouse.
- Married couples have a longer life expectancy than a single individual. Assuming that the younger spouse is female, a couple’s combined life expectancy may be well over 30 years when the older spouse becomes eligible for Social Security benefits.
- Your surviving spouse will get the benefit you would be receiving, if death had not occurred. Thus, if you wait until age 70 and receive $2,200 per month from Social Security, your survivor will receive that much, no matter how much he or she earned.
- What if an older, higher-income spouse decides to defer benefits and dies before starting to collect? It makes no difference. The younger spouse still gains because the survivor’s benefit is pegged to the benefit the decedent would have been receiving at the date of death.
