a close up of a typewriter with a paper that says social security by Markus Winkler courtesy of Unsplash.

The $1 Trillion Question: When Should You Really Take Social Security?

David Findlow |

It's the biggest financial question most retirees will ever face. When should I take Social Security? The answer you get from friends, family, and online articles is almost always, "Wait as long as you can!" That's because your benefit grows by about 8% for every year you delay past your Full Retirement Age (FRA), all the way until age 70. This is good advice. But it's not the only advice. "Wait until 70" is the right answer... unless it isn't. The decision is deeply personal and depends on your answers to three questions.

1. What is Your "Full Retirement Age" (FRA)? First, you need to know your "magic number". Your FRA is the age at which you are entitled to 100% of your earned benefit. It is not 65.

  • Born 1943-1954: Your FRA is 66.
  • Born 1955-1959: Your FRA increases by 2 months each year (e.g., 66 and 2 months for 1955).
  • Born 1960 or later: Your FRA is 67.

If you take benefits before your FRA (as early as 62), your benefit is permanently reduced. If you take it after your FRA, it is permanently increased.

2. What is Your "Break-Even" Point (and Does it Matter)? A "break-even" analysis finds the age at which your total lifetime benefits from waiting until 70 surpass the benefits you would have gotten from taking it at 62. This is typically in your early 80s.

  • The Question: Do you think you will live past 82?
  • The Problem: This is a bet on your own life.
  • If you have a serious health condition, taking it early might be the right move.
  • If your family history is full of 95-year-olds, waiting is a smart bet.

3. What Does the Rest of Your Plan Look Like? This is the one that matters most, and the one a simple online calculator can't answer.

  • Are You Still Working? If you take Social Security before your FRA and you still work, your benefits can be temporarily withheld if you earn over a certain amount. This is a trap.
  • What About Your Spouse? This is a massive factor. When you (the higher earner) pass away, your spouse will get to "keep" the larger of your two benefits. Delaying your benefit is an act of spousal protection. By you waiting until 70, you are maximizing the "survivor benefit" your spouse will live on.
  • Do You Need the Money? If you are forced to retire and have no other funds, taking Social Security at 62 is what it's there for. But if you have a healthy 401(k) and brokerage account, you have a huge opportunity. You can "create a bridge" by living off your own savings from 65 to 70, allowing that Social Security benefit to grow to its maximum.

The Answer: There is no one "best" age. But there is a best strategy. A smart Social Security strategy is about coordination, not just a single date. It coordinates with your spouse, your taxes, and your 401(k) withdrawals to create the best possible outcome.

What's the biggest question you have about coordinating Social Security with your spouse?

Schedule a Consultation These are general strategies and may not be right for your specific situation. If you'd like to discuss how these concepts apply to your financial plan, please feel free to schedule a complimentary call. Click here to schedule