When to begin collecting Social Security

Key Points

  • 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 up to age 70.
  • Your family members may be able to receive benefits through you.

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
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

Note: If you were born on Jan. 1, you should refer to the prior year.

Delaying requesting benefits

Just because Social Security considers age 66, 67 or something in between to be your full retirement age, this doesn't mean 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 ⅔ of 1% per month or 8% annually.

Increase of delayed retirement

Year of birth Yearly rate of increase Monthly rate of increase
1943 or later 8.0% 2/3 of 1%

Note: if you were born on Jan. 1, you should refer to the rate of increase of 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. If you decide to delay your retirement, be sure to sign up for Medicare at age 65. If you do not sign up, in some circumstances your Medicare coverage may be delayed and cost more.

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 as shown in these examples:

Born Full retirement age Implications of taking Social Security payments at 62
1953 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 above, 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…

Years before you reach 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. $1 is withheld from your benefits for every $3 you earn over the limit. No limit on earnings1
Annual earnings limit: $15,720 in 2016

Only applies to earnings1 for months prior to turning full retirement age

You receive credit for the earnings, which may increase your Social Security benefits in the future.
  Annual earnings limit: $41,880 in 2016  

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

If you retire during a year in which you have already earned more than the yearly earnings limit, you receive a full Social Security check for any whole month you are retired (with limited earnings and not performing substantial services in self-employment), regardless of your yearly earnings.

Survivors benefits

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

Social Security benefits are subject to tax if the person’s modified adjusted gross income exceeds certain limits. Up to 85% of Social Security benefits can be taxed.

Your widow or widower is Your unmarried children are Your parents are
Age 60 or older Up to age 18, or up to age 19 if they are full-time high school students Age 62 or older and dependent on you for at least half of their support
Age 50 and disabled and their disability started before or within seven years of the worker's death Any age with severe disabilities, if the disabilities began before age 22  
Any age if not remarried and caring for the deceased worker's child younger than 16 or disabled and entitled to Social Security benefits on a parent's record    

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.

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.
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.