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Claiming Social Security Early vs. Delaying: Pros and Cons

There's no one-size-fits-all approach for deciding when to start claiming your Social Security benefits. You can claim as early as age 62, wait until you turn 70, or claim at any point in between.

There are certain advantages and disadvantages to claiming your Social Security benefits at every age, depending on your personal circumstances. Being strategic about this decision will impact your entire retirement, and maximize your benefits if you do it right. Here are all the pros and cons you need to be aware of in deciding when to start claiming your benefits.

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Claiming early: Pros

The earliest you can claim benefits is 62, which is also the most popular age to claim -- 48% of women and 42% of men start at this age, according to the Center for Retirement Research at Boston College.

The biggest advantage to claiming early is the most obvious: You get your money sooner. When you've spent decades paying into Social Security in taxes, it's understandable to want to start reaping the rewards of your hard work as soon as possible. This is especially true if you're eager to retire but can't quite afford it using the money saved in your retirement funds. Social Security can add a cushion to your retirement savings, making it easier to meet your expenses once you leave your job for good. Similarly, if you've been forced to retire early for any reason, Social Security is a lifeline should you lose your main source of income.

If you have a spouse in the workforce, it's also a good idea to strategize when is the best time for the two of you to claim benefits. You don't have to claim at the same time -- in fact, if your spouse delays claiming benefits, you can claim early to start taking advantage of the extra income as soon as possible while still earning the benefits of delayed retirement credits with your spouse's benefits.

It may be smart to claim early, even if you have a healthy nest egg and a steady paycheck. In theory, you should receive the same amount in benefits over a lifetime regardless of the age at which you claim. If you claim early, you'll receive smaller checks, but get more of them over a lifetime. Claim later, and you won't receive as many checks, but they will each be bigger than if you'd claimed earlier.

However, this equation isn't foolproof. If you have reason to believe you won't live long enough to spend decades in retirement, you may be better off claiming as early as you can. Of course, nobody can predict exactly how long they'll live -- the average man and woman turning 65 today can expect to live until age 84 and 86, respectively, according to the Social Security Administration. However, if you're facing health issues and don't expect to live that long, it may be wiser to claim as early as possible rather than waiting until you have only a few years left to enjoy your benefits.

Claiming early: Cons

It's not always wise to claim your benefits early. One serious disadvantage is that you'll receive smaller checks each month, for the rest of your life, than you would if you wait. In theory, you should receive the same total amount over a lifetime, but in the short term, your monthly Social Security checks may not go as far as you'd hoped.

Let's look at a hypothetical example to see just how much you could be missing out on. Your full retirement age (FRA) is the age at which you'll receive 100% of the benefits to which you're entitled. So if your FRA is 67, and you wait until then to claim, you'd receive $1,300 per month. If you claim at 62, your benefits will be cut by 30% -- leaving you with just $910 per month.

If you're claiming early because you're ready to retire and your own savings aren't enough, consider the fact that you'll receive less in Social Security benefits, too, and decide whether you'll have enough to get by or whether it's better to wait a few years and claim higher benefits.

Delaying benefits: Pros

The longer you wait to claim benefits (up until 70), the bigger each check will be. So the main advantage of delaying your benefits is that you'll receive more money each month once you start collecting.

If you wait until your FRA to claim, you'll receive 100% of your entitled benefits. But if you wait beyond that age, you'll receive a bonus on top of your full amount to make up for all the months you weren't receiving benefits at all. If your FRA is, say, 67 and you wait to claim benefits until 70, you'll receive a 24% bonus over your full amount. So if you would have received $1,300 per month by claiming at 67, you'd receive $1,612 by waiting until 70. (Keep in mind, too, that this bonus maxes out at age 70, so there's no additional benefit to waiting to claim until after that age.)

This can be a lifesaver for those who are seriously behind on saving for retirement. If you're going to rely on Social Security to make ends meet, it's in your best interest to maximize those benefits.

The amount you receive in benefits will be locked in once you claim. If you delay and receive that boost, you'll continue receiving that boost for the rest of your life. Likewise, if you claim early and your benefits are reduced, you'll receive those smaller checks for life. So delaying can play out in your favor if you spend several decades in retirement -- the longer you live, the more you will receive over your lifetime.

Delaying benefits: Cons

While delaying claiming benefits by a few years will result in bigger checks, you may not actually receive more over a lifetime than you would if you had claimed earlier. Although you're receiving more each month, that's just to make up for the years you weren't receiving any benefits at all. If you don't reach your "break even age" -- or the age at which you've received more over a lifetime by waiting to claim than you would have received by claiming early -- it may not be worth it to wait.

For example, say your FRA is 67. If you claim early at 62, you'd receive $910 per month (or $10,920 per year), and if you delay until 70, you'd receive $1,612 per month ($19,344 per year). Here's how much you'd have received in total benefits at different ages:

Age at Death Total Lifetime Benefits When Claiming at 62 Total Lifetime Benefits When Claiming at 70
70 $87,360 N/A
75 $141,960 $96,720
80 $196,560 $193,440
85 $251,160 $290,160

Source: Author's calculations

So in this scenario, you'll have to live past age 80 in order to "break even" and earn more in lifetime benefits by delaying rather than claiming early. That can be a good thing if you expect to live a long time, but if you don't expect to live past 80, it may be more advantageous to claim earlier rather than later.

Which option is right for you?

Collecting your own Social Security benefits is a personal decision that depends on your unique situation. If you need your benefits to pay the bills, claiming early may be your best bet. But if you're still working, are struggling to save, and need all the help you can get, try to delay benefits for as long as you can, up to age 70, to maximize those precious monthly checks.

No matter what you choose, weigh the advantages and disadvantages before deciding. This choice will impact the rest of your retirement, so it's important to take seriously.

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