When to begin collecting Social Security

  • Social Security eligibility depends on your birth year.
  • Reduced benefits are available at age 62.
  • The longer you wait to begin collecting, the higher your payment will be.
  • Your family members may be able to receive benefits through you.

Near retirement

While Social Security likely will not cover all your expenses in retirement, it can supplement income from other savings accounts and employer plans. Now is the time to understand the implications of when you begin taking your Social Security benefits.

You can begin receiving reduced benefits as early as 62, but to receive your full benefit, you must reach full retirement age (as defined by Social Security). Your full Social Security retirement age depends on the year you were born.

Full Social Security retirement age
Birth year Full retirement age
1937 or earlier 65 years
1938 65 years, 2 months
1939 65 years, 4 months
1940 65 years, 6 months
1941 65 years, 8 months
1942 65 years, 10 months
1943-1954 66 years
1955 66 years, 2 months
1956 66 years, 4 months
1957 66 years, 6 months
1958 66 years, 8 months
1959 66 years, 10 months
1960 or later 67 years
Delaying requesting benefits

Just because Social Security considers age 65 (or 66, or 67) to be your full retirement age, doesn't mean that you have to start collecting benefits at that time. There is a considerable advantage to waiting.

For each month past your full Social Security retirement age you put off receiving retirement benefits, your benefit will automatically increase by a certain percentage. This increase depends on your year of birth.

Increase for delayed retirement

Year of birth Yearly rate of increase Monthly rate of increase
1933-1934 5.5% 11/24 of 1%
1935-1936 6.0% 1/2 of 1%
1937-1938 6.5% 13/24 of 1%
1939-1940 7.0% 7/12 of 1%
1941-1942 7.5% 5/8 of 1%
1943 or later 8.0% 2/3 of 1%

Note: If you were born on January 1st, you should refer to the rate of increase for the previous year.

You qualify for the maximum benefit by waiting to collect until age 70, so there is no reason to delay beyond that point.

Retiring early

If you can't or don't want to wait until full Social Security retirement age, it's possible to begin collecting Social Security as early as age 62. While this may seem tempting, you should try to avoid it if possible. Your monthly benefit will be reduced by about 0.5% for every month you start collecting before full retirement age. That may not sound like much, but it adds up:

Born Full retirement age Implications of taking SS payments at 62
1948 66 25% lower benefit than if you wait until 66
1961 67 30% lower benefit than if you wait until 67
Working while receiving benefits

At age 62 or older, you can continue to work and also receive Social Security retirement benefits. Be aware that there may be a tradeoff between working and collecting, depending on your age and your employment income.

If you begin Social Security when you are…

Younger than full retirement age In the year you turn full retirement age Older than full retirement age
  • $1 is withheld from your benefits for every $2 you earn above the annual earnings1 limit.
  • Annual earnings limit: $15,120 in 2013
  • $1 is withheld from your benefits for every $3 you earn over the limit.
  • Only applies to earnings1 for months prior to turning full retirement age
  • Annual earnings limit: $40,080 in 2013
  • No limit on earnings1
  • You receive credit for the benefits you would have earned, which may increase your Social Security payments.
Survivors benefits

When you die, your spouse and other family members may be eligible for survivors benefits, provided they meet the following conditions.

Your widow or widower is Your unmarried children are Your parents are
  • Age 60 or older
  • Age 50 and disabled
  • Any age if not remarried and caring for your child younger than 16 or disabled and entitled to Social Security benefits on your record
  • Up to age 18, or up to age 19 if they are full-time high school students
  • Any age with severe disabilities, if the disabilities began before age 22
  • Age 62 or older and dependent on you for at least half of their support
Applying at the right time

When you apply for Social Security can make a significant difference. The same is true for Medicare, which you are eligible for at age 65. If you haven't applied yet, here are guidelines to consider.

Benefit When to apply Where to apply Keep in mind
Social Security Three months before the date you will retire Local Social Security office, or on the SSA website Only the SSA can provide an up-to-date calculation of your benefits.
Medicare Three months before your 65th birthday Local Social Security office, or on the SSA website If you wait, you may wind up paying more for Medicare Part B (medical insurance) and Part D (prescription drug insurance) coverage.

For most people, Social Security is just one part of a complete retirement plan. That's why it's a good idea to review your total retirement income situation with your Ameriprise financial advisor. Your financial advisor can help you build step-by-step toward a confident retirement.

1 Earnings include salaries, bonuses, and commissions, but not pensions, annuities, and investment income, which do not affect your Social Security benefit.

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.

Remember to consult with a Social Security agent when making decisions about your Social Security benefits.

Ameriprise Financial Services Inc., and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.