What the Average Retiree Gets Wrong About When to Start Taking Social Security

One of the biggest retirement decisions you'll make is when to start Social Security. It's also one of the easiest decisions to get wrong, both because there are so many individual factors at play and because people have many misconceptions about how benefits work.

Optimizing your benefit claim is easiest when you understand the elements that determine your checks. You also want to avoid common misconceptions, like those that follow.

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How your claiming age affects your checks

You may already know that you can apply for Social Security as early as 62, but doing so is considered early claiming and permanently reduces your benefits by up to 30%. To avoid this cut, you have to wait until your full retirement age (FRA) to apply for benefits, which is 67 if you were born in 1960 or later.

Every month that you delay your application increases your benefits until you turn 70 and qualify for your largest checks. But that doesn't mean delaying Social Security is always your best option. For many, it does result in the largest lifetime benefit, though there are exceptions.

Those with short life expectancies may receive a bigger lifetime benefit by claiming early, and early claiming might be necessary if you're unable to work and lack sufficient personal savings. But it's worth considering all your options before deciding when to sign up, so you can get a sense of the trade-offs of each age.

The easiest way to do this is to create a My Social Security account. You'll need to complete identity verification when you first sign up. After that, you can set up a username and password for future logins. There's a tool here that can estimate your Social Security benefit at every possible claiming age, so you can figure out how much delaying benefits will net you.

What happens when you work and claim at the same time

Those who choose to apply for Social Security early risk losing money to the earnings test if they're still working. That's not a problem for all early claimers, though. It depends on your age and your income.

In 2026, if you'll be under FRA all year, you lose $1 for every $2 you earn over $24,480. Those who will reach their FRA this year lose only $1 for every $3 they earn over $65,160 if they earn that much before their birthdays. For some people, entire months of benefits could be lost.

Fortunately, that money isn't gone forever. The Social Security Administration gives you a permanent benefit boost at your FRA to make up for what it withheld before. But that's little comfort in the months when you're losing checks. If you'd rather avoid losses altogether, it's better to wait to apply until you either reach your FRA or retire.

The importance of coordinating with your spouse

Married people do better when they work to optimize their household benefits rather than a single person's checks. Sometimes, the best move is for each person to claim his or her own retirement benefit and delay checks as long as possible, provided each can afford to wait and neither has significant health issues.

But if one person has significantly outearned the other throughout a career, it can sometimes be better for the lower earner to apply early. Doing so gives the household extra monthly income while the higher earner delays receiving checks. Then, when the higher earner applies, the lower earner can switch to a spousal benefit if that provides more than he or she is currently receiving.

Keep in mind that you can't claim spousal benefits until your partner has applied for retirement benefits. It could influence when you choose to sign up if your partner only qualifies for spousal benefits.

Sit down with your spouse and come up with a plan for when each of you hopes to apply for Social Security. But feel free to adjust if your circumstances change down the road.

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