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If you are thinking about applying for Social Security benefits you may be wondering whether taking them early is as wise as waiting to collect a bigger check. As with many retirement planning questions, the answer depends on your unique circumstances. Does an objective look at the math offer a compelling argument either way?

Social Security Benefits and Full Retirement Age

Before we crunch the numbers, let’s look at the factors that go into the calculation.

Social Security had for decades referred to age 65 as normal retirement age. The definition is a little different now. Today it’s called Full Retirement Age (FRA) and it’s a moving target.

Here’s what FRA is if you were born:

  • between 1943 and 1954 – 66
  • between 1955 and 1959 – 66 and change
  • in 1960 or later – 67

Starting with those born in 1955, FRA is 66 and two months. Add an additional two months for each year after that until you get to 1959. FRA for those born in 1959 is 66 and 10 months. Straightforward, right?

Okay, on to the math…

Numbers Don’t lie – Neither do They Answer any Questions

To determine whether it makes sense to apply for Social Security benefits early or to delay them requires an understanding of the numbers that go into the equation. And here’s why FRA matters.

It’s the age at which you are entitled to your (wait for it) full benefit.

If you take Social Security early, the amount you receive will be discounted. Now, the flipside is that if you delay, your benefit increases. Let’s look at an example.

According to the Social Security Administration, a 62 year old (entitled to the maximum monthly benefit) retiring in 2021 would receive $2,324.1 If this person waits until FRA at 66, then the amount jumps to $2,841. Waiting until age 70 takes the payment to $3,895.

So, the numbers don’t lie. Waiting until age 70 yields the highest monthly benefit. But does that mean you should always wait? If you wait, you miss a bunch of payments.

Here’s what the cumulative benefit (including a modest cost of living adjustment) would be at age 80 assuming benefits start at 62, 66 or 70.2

Start at Age 62:      596,681

Start at Age 66:      560,642

Start at Age 70:      548,897

So, now it appears that delaying doesn’t add up. Here again, the number don’t lie. But they don’t tell the whole story.

What Other Variables are There?

The first thing to think about is how this decision might affect your spouse.

If you collect Social Security before FRA, your spouse’s survival payout will be reduced. Under normal circumstances a survivor receives half of what the spouse got. If you start at age 62, the normal survival benefit (50%) will be further reduced by nearly a third.

Then there’s the question about what you’ll be doing between age 62 and age 70. If you keep working your benefit may be reduced based on your earnings. If you make more than $18,960, then every $2.00 over that amount will reduce your Social Security benefit by $1.00.

If you make $50,000, then your benefit will be reduced by $15,520 (50,000 – 18,960 = 31,040 ÷ 2).

Then, there’s the real big one. What if you live longer?

By the time you reach 84, the cumulative benefit of waiting until 70 eclipses the two earlier start dates. It never looks back. Here’s what that looks like at age 90:

Start at Age 62:      974,721

Start at Age 66:      999,512

Start at Age 70:    1,120,289

And finally, you definitely need to take your personal situation into consideration. Your health and other personal circumstances are much more important than the mathematics behind the decision of when to take benefits. Having a solid retirement plan in place will also help.

Consult your Financial Advisor to establish a plan that meets your needs and helps guide you toward a financially secure retirement.


1 Source: Social Security Administration website: Benefit Examples For Workers With Maximum-Taxable Earnings.

2 2020-2021 COLA was 1.3 percent. Source: Social Security Administration website: Latest Cost-Of-Living Adjustment.

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