When should you start collecting Social Security?

Jul 17, 2012

One of the great debates among those approaching retirement is whether to take Social Security benefits at age 62, 66 or 70.  

There's no one-size-fits-all answer. Financial commentator Greg Heberlein and KPLU's Dave Meyer explore the options on this week's Money Matters.

What’s at stake? 

If you start collecting cash at age 62, your benefit will be three-quarters of what you would get at age 66 (Social Security's current full retirement age).

If you wait until 70, your benefit will be 32% higher than at 66. 

For middle incomers, a majority of benefits are taxable. Also, those who continue to hold jobs likely will see payments reduced.

Why start early? 

Those already in low-income jobs, or without a job, might benefit. That would apply also to those saddled with a mortgage or some other large bill they’re having trouble paying. Those whose families tend to not reach average life expectancy may consider collecting early.

Some of the same considerations may apply when age 66 is reached.  But if the money isn’t required at this point, or if the tax burden might increase, or you come from a long line of centenarians, then waiting until 70 makes sense.

Waiting until 70 gives you the maximum monthly payout. The benefit at 70 is 76% higher than at 62.

Greg took the early payout option at 62. Longevity in his family tree is split – one side died well before the average, the other side died well after. Getting the money sooner rather than later made more sense for him.  

Note that if one spouse takes Social Security first, and the second waits until age 70, the spouse who waits may collect an amount equal to half of the other spouse’s age 66 benefit until he or she reaches 70.  Also, spouses who otherwise wouldn't qualify for Social Security on their own may still be eligible to collect payments. See the Social Security spousal benefits page for more information.

The Social Security website offers some handy planning tools:

If you're having trouble making up your mind about when to start taking your payments, maybe this advice from Social Security will ease your mind:

If you live to the average life expectancy for someone your age, you will receive about the same amount in lifetime benefits no matter whether you choose to start receiving benefits at age 62, full retirement age, age 70 or any age in between.

So, even though there's no one-size-fits-all answer, it's highly likely that the choice you make will be the right one.


One listener strongly disagreed with Greg's decision to take the money early. She recommends reading Robert Powell's MarketWatch article, "With rates this low, it pays to delay Social Security". 

It's well worth reading. It cites a paper by the National Bureau of Economic Research that finds most households would collect more money if they delay collecting Social Security.

In the end, though, it still comes down to the choice that's right for you. That's something only you can decide.