Key Takeaways
- For anyone born in 1960 or later, full retirement age is 67, and claiming Social Security at 62 cuts the benefit by 30% for life.
- On a $1,000 benefit at 67, that’s $700 a month at 62, and the smaller checks only stay ahead in total until 78 years and 8 months.
- If a married higher earner claims early, the widow or widower can get a smaller check too, and anyone who claims early while still working can have benefits held back until full retirement age.
- If you can pay the bills until 67, waiting is the better deal, though poor health or having no other income can make an earlier claim the right call.
If you were born in 1960 or later, Social Security puts your full retirement age at 67. Claim any earlier, and you’ll get a smaller check for the rest of your life.
Americans born in 1960 turn 67 next year, and plenty of people a few years younger are deciding right now when to claim. If you can wait until 67, please do.
A $300 smaller check, for life
Let’s take a hypothetical: your benefit at 67 is $1,000 a month, the round number SSA uses in its own example. Claim at 62, the earliest Social Security will pay you, and you get $700 instead.
That comes straight from SSA’s own table. For anyone born in 1960 or later, claiming at 62 cuts the benefit by 30%, and the cut lasts for life.
The gap grows every year
Social Security’s yearly raises won’t help you catch up, because each one is a percentage of the check you already get. SSA has set 2027’s raise at 3.6%, starting with December’s benefits, which are paid in January. On $700, that’s $25.20 a month. On $1,000, it’s $36.
So after one raise, the gap is $310.80 a month, up from $300. Every raise after that adds a little more to it.
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Live past 78 years and 8 months, and you come out ahead by waiting
If you claim at 62, you do get five years of checks first. That’s 60 months at $700, or $42,000, before someone who waits collects anything at 67.
From 67 on, waiting gets you $300 more a month. It takes 140 months of that extra $300, or 11 years and 8 months, to make up the $42,000. So the early claim only keeps you ahead until 78 years and 8 months. These figures leave out raises, which lift both checks by the same percentage.
Every month you live past that, you’re $300 behind for having claimed early, before raises. By 90, waiting would have paid you $40,800 more.
Your spouse could be stuck with the smaller check
If you’re married and the higher earner, you’re also deciding what your spouse lives on after you’re gone.
SSA never pays anyone more than the highest single benefit they’re entitled to. So a widow or widower ends up with one check: whichever is bigger, their own benefit or the survivor benefit.
A survivor who waits until full retirement age gets 100% of the late spouse’s benefit, plus any delayed retirement credits the spouse earned. But if the late spouse had taken a reduced retirement benefit, the survivor’s benefit is reduced too. So if you take $700 at 62 instead of $1,000 at 67, your spouse could be living on a smaller check for years.
Still working before 67? You’d be waiting anyway
Claiming early while you’re still working comes with a catch. In the years before the one you turn 67, SSA holds back $1 of benefits for every $2 you earn over the limit, which is $25,560 in 2027. In the year you turn 67, the 2027 limit is $67,920, and SSA holds back $1 for every $3 over it.
Say you earn $35,560 in 2027, which is $10,000 over the lower limit. SSA holds back $5,000 of your benefits.
That money isn’t lost. At full retirement age, SSA recalculates your benefit to credit the months it held back, leaving those months out of the early-claiming cut. Your monthly check goes up from then on, and you don’t have to apply. But you get the money back as a higher monthly check from 67 on, with no lump sum. So if you earn well over the limit, you’d mostly be waiting for that money anyway.
Wait if you can
If you can pay your bills without it, waiting until 67 is about the cheapest protection against a long life you’ll find, for you and for your spouse.
Of course, if you’re in poor health or have no other way to pay the bills, claiming earlier can be the right call. If you’re still working, check SSA’s earnings limit for the year before you claim, since it changes every year.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
