When Should You Claim Social Security? Understanding Your Break-Even Point

Should you collect Social Security at 62, wait until full retirement age, or hold off until 70? A helpful starting point is your “break-even” age: when the larger checks from waiting catch up with the smaller checks you could have collected earlier.

Consider someone with these estimated monthly benefits:

• Age 62: $2,733

• Age 67: $3,882

• Age 70: $4,814

Waiting until 67 means passing up five years of payments totaling $163,980. In exchange, the monthly benefit increases by $1,149. The larger payments recover those missed benefits around age 78 years, 11 months.

Waiting until 70 instead of 62 means passing up $262,368, but receiving an additional $2,081 monthly. That break-even point arrives around age 80 years, 6 months.

Comparing 67 with 70, the person gives up $139,752 to receive an additional $932 monthly. Waiting catches up around age 82 years, 6 months.

By age 85, total benefits would be approximately $754,308 if claimed at 62, $838,512 at 67, or $866,520 at 70.

These calculations assume fixed payments and exclude taxes, cost-of-living adjustments, investment returns, and any benefits withheld because of working.

But retirement planning involves more than arithmetic. Your health, family longevity, cash needs, other retirement assets, and potential survivor benefits for your spouse all deserve consideration.

Earlier benefits can provide useful income today. Waiting can provide greater monthly security later.