62, 67, or 70—When Should You Apply for Social Security?

“I’m eligible for monthly benefits. Should I file today or delay?”

Filing for Social Security at 62 will result in a permanently lower monthly benefit over a longer period. Wait until 70, and you maximize your monthly payment, but you’ll receive fewer checks.

Moreover, if you are working and under full retirement age, your benefit may be reduced.

Many variables can be inputted into the calculation. There is no magic formula. It’s a personal decision and can be complex.

Conventional wisdom suggests that if you don’t need the money today, consider delaying as long as you can. But it’s not always that simple.

Basic guidelines

What are your cash needs? Are you still working? If you are, does your monthly income meet or exceed your expenses? If so, it may be wise to delay.

If you have retired, could you consider working part-time? However, if you have fewer resources and can’t work, your options may be limited.

Additionally, there are considerations regarding life expectancy and health. When a male turns 67, Social Security estimates life expectancy at 82.63 years. For a female, that rises to 85.23 years (Social Security 2024 Trustees report 2021 life table).

Claim early

You simply want to retire, and Social Security, combined with savings, enables you to do so.

Are you in poor health, or are you battling a chronic health condition? If so, it may be advantageous to claim early.

The breakeven is roughly between 78 and 82 years old but can vary based on factors such as cost-of-living adjustments.

Claim later

You enjoy working. That’s what gets you up in the morning. Sure, the income is a motivator, but you don’t dread Monday mornings.

The future is unknown, but you are in good health, and your family history suggests a longer life expectancy.

You have other sources of income, such as rental properties, a pension, consulting income, or a part-time gig. Put another way, you wouldn’t mind the extra cash from Social Security, but it’s not needed.

The bridge between retirement and 70

What if you retire before age 70 but want to wait until age 70 to apply for benefits?

You have savings, but your cash inflow has been reduced. Your bills are a priority, and a reduced cash inflow must be made up somewhere.

Making larger withdrawals from your retirement portfolio is an option, but it will result in a smaller nest egg to appreciate as you age.

So, how can you bridge the gap?  Is your spouse still working? Can you reduce expenses? Do you have a pension that can help cover the gap between retirement and age 70?

These are just some of the factors that come into play.

What about your spouse?

Your spouse may claim benefits based on a husband’s or wife’s earnings as long the person is 62 or older, and the person’s spouse is already receiving a monthly Social Security check.

Your full spouse's benefit could be up to one-half the amount your spouse is eligible to receive at their full retirement age. If you receive your spouse’s benefits before you reach full retirement age, your payment will be permanently reduced.

However, your spouse’s maximum benefit remains 50% of the full retirement age benefit, not their higher amount, including delayed retirement credits. For example, if the higher earner's full retirement age benefit is $2,000, the spousal benefit is capped at $1,000 (50%). If the higher earner waits to 70 and their benefit increases to $2,400, the spousal benefit remains at $1,000.

Yet, if you need Social Security sooner, the lower-earning spouse can file based on their income, which allows the higher-earning spouse to delay. When the higher earner begins to collect, the lower earner is eligible to switch to a higher spousal benefit, assuming, of course, the spousal benefit is higher.

Your decision will be based on many factors.

That said, we don’t expect you to make this decision alone. We understand the complexities involved, and we can help you evaluate various scenarios tailored to your circumstances.

Ultimately, the decision is yours. It’s personal, but we would be happy to assist you if you have any questions.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.