There is probably no question I am asked more often than some version of this: “When should I file for Social Security?” And I’ve discerned from my emails over the years that there is no issue senior citizens fret over more than the answer to that question.
To answer it, many people prepare spreadsheets. They construct matrices. They buy books. They consult financial planners. And who knows, maybe they even get in touch with mystics, palm readers, and other charlatans.
What they seem to be looking for is a magic answer. They want to believe that there is some secret formula that, if they only knew it, would guide them to pick the absolutely perfect age to start their Social Security benefits.
Well, guess what, folks. There is no magic answer. There are no secrets. There are no special formulas. You simply have to sit down, maybe with a calculator and pencil and paper, and go over your options.
And what are those options? Well, you could start your retirement benefits as early as age 62. If you do that, your benefit will be reduced by 30 percent. In other words, you'd get 70 percent of your full retirement age (FRA) benefit.
Or you could wait until your FRA and get 100 percent of your Social Security benefit.
Or you could file for your Social Security benefits anytime between age 62 and your FRA. (Your benefit is reduced by roughly one-half of 1 percent for each month you start benefits before your FRA.)
Or you could wait until age 70 and get a bonus of about 28 percent added to your monthly benefits. (The bonus is two-thirds of 1 percent for each month you delay filing for benefits beyond your FRA. In other words, you could file anytime between your FRA and age 70 and get the calibrated bonus added to your monthly benefit rate.)
And by the way, there is absolutely no advantage to waiting beyond age 70 to file for your Social Security benefits.
So, you’ve got to choose sometime between the ages of 62 and 70 to start your benefits. And as I said, there is no secret or magic formula to help you make that decision. In its very simplest form, it comes down to this obvious choice. Do you want smaller monthly benefits but for a longer period? Well, then start those benefits sometime between age 62 and your FRA. Or do you want larger monthly benefits for a shorter period? Then you should wait to start your benefits sometime between your FRA and age 70.
To help you make that decision, think about a couple of things, such as your health. If you’re active and robust and think you'll still be kicking when you’re in your 90s, then it might be best to wait until 70 to file for benefits. On the other hand, if you are like me and came out on the shallow end of the longevity gene pool (neither my dad nor any of my uncles lived until age 60), then it might make sense to file for Social Security as soon as you’re eligible.
And what about your financial well-being? For example, if you are doing well and have other sources of income, meaning that your Social Security check is just frosting on your retirement cake, then maybe you should start benefits early. But if your Social Security is going to be your primary source of income in retirement, then you might want to maximize those benefits by starting them later.
And speaking of maximizing benefits, many retired men have told me that one of their primary retirement goals is to maximize potential widow’s benefits for their wives. If that is your concern, then if you wait until age 70 to file, your wife’s eventual widow’s benefits will include that bonus you get for delaying the start of your own benefits.
Having said all that, you’ve got to approach the decision of when to start your benefits by realizing that it’s a gamble. Or to put that another way, if you can tell me the date when you are going to die, then I can tell you the absolute best time to start your benefits. And since no one really knows that answer, no one really knows the best Social Security start date.
For example, I can’t tell you how many times over the years I’ve heard from a recent widow who told me something like this: “My husband insisted on waiting until 70 to get the highest Social Security benefit possible. He thought he was going to live until 100. And then he died at age 72. Gosh, I wish he had filed for his Social Security sooner!” (Of course, the bit of consolation I could give her is that she will get higher widow’s benefits based on his age 70 Social Security start date.)
On the other end of the spectrum is this story I heard from a sprightly old man in a local coffee shop. He said: “I took my Social Security at 62. And now I’m 95. If I knew I was going to live this long, I would have waited to start my benefits at a later age!”
So again, you never really know if you are making the right choice regarding when you should start your benefits. And with that in mind, here is another piece of advice I can give you. Considering all the factors I talked about earlier (and other possible factors I didn’t have space to mention), just make the best choice you can about when to file for Social Security—and then live with it. I can’t tell you how many people I’ve heard from over the years who just fret and fret some more over that decision—even after they have made it. My advice: Don’t worry! Be happy! Make the decision and enjoy retirement!
Besides, I’ve also learned this over the years after having heard from thousands of readers about this issue. Most people trying to decide when to start their benefits are not between a rock and a hard place, Social Security speaking. They are between a pillow and a soft place. In other words, they really can’t go wrong no matter which decision they make. So throw away those spreadsheets and stop reading tea leaves or gazing into crystal balls. Pick a Social Security start date and be happy.
And finally, some shameless self-promotion. If you really want to consult something, buy my book, “Social Security: Simple and Smart.” There is a whole chapter in that book about when and how to file for Social Security benefits.
