When should I claim Social Security benefits? This is one of the most essential questions you can ask yourself when planning for retirement. It’s a decision that determines the amount of government benefits you – and possibly your spouse – will receive throughout the rest of your life.
You receive 100% of your Social Security benefits at your full retirement age [FRA], and claiming benefits before or after this date can greatly impact your lifetime income. That’s why it makes sense to start answering the question of when you should claim benefits with a clear understanding of your FRA.
What Is Full Retirement Age?
As previously mentioned, FRA is the age at which you can claim your full Social Security benefit. Your full benefit is called your Primary Insurance Amount and it is calculated using your highest 35 years of earnings.
FRA was age 65 for much of Social Security’s history. Then in 1983, it was raised to 67 years old for those born after 1960. This change was implemented gradually over several years, and in 2025, retirees may have a FRA between age 66 and 67.
Your FRA is:
- age 66 if you were born between 1943 and 1954.
- age 66 and 2 months if you were born in 1955.
- age 66 and 4 months if you were born in 1956.
- age 66 and 6 months if you were born in 1957.
- age 66 and 8 months if you were born in 1958.
- age 66 and 10 months if you were born in 1959.
- age 67 if you were born in 1960 or later.
An effective Social Security strategy requires knowledge of your FRA. Once you know it, you can begin to understand your claiming options.
Social Security Claiming Options
While your FRA is important, there is another number you must know to effectively plan your Social Security benefits – 62. This is the earliest age you can claim retirement or spousal benefits. However, claiming benefits before your FRA leads to a permanent reduction in your monthly benefit amount.
You can also choose to delay your benefits past FRA, up to age 70, if you have enough resources or if you remain gainfully employed. By doing so, you can increase your payments through delayed retirement credits.
Here’s how your age impacts your benefits:
Claiming Early: Age 62 – FRA
When you claim benefits early, your monthly Social Security income is permanently reduced by up to 30%. The amount of the reduction depends on the number of months before FRA that you claim benefits.
The reduction in benefits does not necessarily make claiming your Social Security benefits early a poor decision. For some people, immediate income is vital to their plan to retire early or enjoy the first years of their retirement. Early claiming can also be important if you have health issues that require income or that are likely to shorten your life expectancy.
Before you choose to claim benefits at the earliest opportunity, you should consider a few factors. The first is your estate plan because claiming early can reduce the amount of income your spouse receives after your passing. The second is the earnings test which reduces your monthly benefit if you claim benefits and continue to work before reaching FRA.
Claiming at FRA
If you claim Social Security benefits at your FRA, you can strike a balance between immediate income needs and potential growth. This allows you to claim your full benefit without a permanent reduction. On the other hand, you lose the potential for higher monthly income you could have earned if you delayed.
Claiming Late: FRA – Age 70
By delaying your Social Security benefits past your FRA, you gain an 8% per year increase up to 24% if you were born in 1960 or later. This additional income is applied for each month that you delay and is known as Delayed Retirement Credits.
In addition to delayed retirement credits, your benefit will grow each year due to annual Cost of Living Adjustments. A higher benefit amount can be extremely beneficial to your retirement and estate plans – especially since delayed retirement credits apply to survivor benefits as well as retirement benefits.
While there are advantages to delaying Social Security benefits, there are also downsides. First, you forgo the additional income that Social Security provides in the early years of your retirement and could prematurely draw down your savings. Second, there is the risk of health problems later in life that leave you less time to enjoy your benefits.
Factors To Consider When Determining When to Begin Social Security Benefits
Your Social Security claiming strategy should be made with your personal financial circumstances and retirement plan in mind. The right choice is unique to your situation and often varies widely between individuals.
As you plan your retirement, there are several factors that you need to consider before determining when to claim Social Security benefits. These include your intended retirement date, personal financial situation, health, and marital status.
Intended Retirement Date
If you plan to retire early, you may need the additional income from Social Security to cover your expenses. On the other hand, if you plan to retire later in life, you may be more comfortable delaying benefits. As you make this decision, be sure to consider the earnings test and how it could impact your monthly benefits.
Personal Financial Situation
Your personal financial situation – including assets, debts, and income sources – is vital to crafting an effective Social Security strategy. If you have little other income to cover your living expenses, you may need to claim Social Security early or at FRA. Conversely, if you have income or assets that can cover your expenses, you may benefit from delaying and enjoying a higher monthly benefit amount.
Health And Longevity
Your life expectancy can have a significant impact on your decision of when to claim Social Security. Existing health conditions and family medical history are important to consider as you determine this figure.
Marital Status and Spousal Benefits
If you are married, it is crucial to coordinate benefit decisions with your spouse. This is especially important if one person in your relationship earned significantly more since your income is used to calculate spousal and survivor benefits.
Spousal benefits are calculated as up to 50% of your spouse’s Primary Insurance Amount. Delayed retirement credits do not apply to this type of benefit, but claiming early can reduce spousal benefits.
Survivor benefits are the higher of the two amounts a married couple was receiving at the time of the first spouse’s passing. Unlike spousal benefits, delayed retirement credits do increase this type of benefit.
As you consider these factors, it is wise to discuss your Social Security strategy with an experienced team of financial professionals. A financial advisor can help you determine the optimal time to claim benefits as well as helping you craft a well-rounded retirement plan.
Craft Your Social Security Strategy With Help From Meld Financial
At Meld Financial, we help clients maximize their government benefits from Social Security. These benefits are often crucial to a successful retirement, and we consider them in the context of your wholistic financial picture – including coordination with your spouse and your intended retirement date.
Retirement planning is at the center of our comprehensive wealth management plan, Financial Fingerprint®. This nimble plan brings together the most important pieces of your financial puzzle into one easy-to-understand plan that grows with you.
For a personalized Social Security analysis or to get started with your Financial Fingerprint®, contact a member of our team today.
