If you take early Social Security, you start collecting retirement benefits before you reach full retirement age. That’s age 66 or 67, depending on the year you were born.

  • If you’re in poor health, it might be better to start collecting your benefits sooner rather than later.
  • Your benefit increases by 8% each year you wait to collect past your full retirement age, up to age 70. Savvy investors may be able to beat that.
  • If you need more money now and expect your expenses to go down later, it might make sense to start benefits early.

Social Security Retirement Age

Full retirement age is when you first become eligible for full (unreduced) Social Security retirement benefits. If you were born in 1960 or later, your full retirement age is 67. If you were born before that, the age is somewhere between 65 and 66 years and 10 months, depending on your birth year.

No matter what your full retirement is, you can start collecting benefits as early as age 62 or as late as age 70. Your birth year and your age when you start to collect benefits affect your monthly benefit amount:
1937 or earlier 65 20%
1938 65 and 2 months 20.83%
1939 65 and 4 months 21.67%
1940 65 and 6 months 22.50%
1941 65 and 8 months 23.33%
1942 65 and 10 months 24.17%
1943–1954 66 25.00%
1955 66 and 2 months 25.83%
1956 66 and 4 months 26.67%
1957 66 and 6 months 27.50%
1958 66 and 8 months 28.33%
1959 66 and 10 months 29.17%
1960 and later 67 30.00%

You can earn “delayed retirement credits” each month that you wait to collect beyond your full retirement age, up until age 70. This increases your monthly payment by 2/3 of 1% for each month that you wait—or 8% a year.

Even though more money is usually better, that’s not always the case with collecting Social Security benefits. Here are four times it might be better to forgo the larger check and start collecting benefits sooner.

1. Your Health Is Failing

Retirement can last 20 or 30 years (or more) if you’re a healthy senior, but unfortunately, many people develop illnesses as they age. That’s why planning for healthcare costs in retirement is so important.

If you’re in poor health, you may need the extra money that Social Security benefits provide—and opt to claim benefits early. And, sadly, if you think you may not live to be very old, you could come out ahead on a lifetime basis.

Still, this strategy could backfire if you have a spouse. If you start collecting early, it will lower your monthly benefit. But it will also lower any survivor benefits your spouse is entitled to after you pass. If your spouse outlives you for many years, this could be a serious financial hit.

2. You Think You Can Get a Better Return

You’ll get an 8% increase in your benefit each year past your full retirement age, up until you reach age 70. That means if you’re 67 and wait three years to claim benefits, your check will be 24% larger when you finally start.

But if you’re a savvy investor, it might make sense to start collecting those benefits sooner rather than later. Why? You could collect your Social Security benefits early, invest the money, and beat that 8% annual return.
Of course, there are risks associated with this strategy. Unless you have a crystal ball, you have no idea how the markets will perform. One bad year could wipe out any gains, as well as your initial investment.

3. You Need More Money in the Early Retirement Years

In the first stage of retirement, many people are healthy, have a lot of energy, and spend more money on hobbies, travel, and other entertainment. As a result, many newbie retirees need increased cash flow during the earlier years of retirement—and less as they get older.

If you fall into this category and want to boost your cash flow now, early Social Security benefits could help. Sure, you’ll have a lower payout than if you waited. But if enjoying your retirement while you’re still healthy is more important than collecting a larger Social Security check later, it makes sense to start early.

4. You’re Afraid Social Security Will End

Social Security is one of those benefits that’s supposed to be around forever. But the system is in trouble, and benefits may change in the future. That worries people of all ages.

While older people—particularly ones in or nearing retirement age—worry about the fate of Social Security, they likely won’t see much impact. Still, if the thought of losing out on Social Security benefits is keeping you up at night, it may be better to start claiming early or at full retirement age rather than to hold off for an increased benefit.

The Bottom Line

When to start collecting Social Security depends on each retiree’s unique situation. The longer you wait to start collecting, the larger your monthly check will be. But that doesn’t automatically mean you’ll have the highest lifetime benefits.

If your health is failing, if you need more cash in the early years of retirement, or if you are worried that Social Security will go away, claiming early or at your full retirement age may make sense. If you’re not sure which Social Security claiming strategy to use, it can be helpful to work with a trusted financial planner.