The One Decision That Echoes for the Rest of Your Life
You’ve been building your career, maxing out your 401(k), maybe collecting RSUs, and investing smartly. But now you’re staring down one of the most underestimated decisions in your financial life: When should you start collecting Social Security?
It sounds simple. You hit 62, you’re eligible. But what if taking it early costs you hundreds of thousands of dollars over time? Or what if waiting too long backfires?
This isn’t just about a government check—it’s seeking to optimize one of your most durable income streams in retirement. Social Security lasts for life, adjusts with inflation, and can even provide benefits for your spouse. Get it wrong, and the impact ripples for decades.
In this article, we’ll break down the key considerations, reveal the high-stakes math behind the timing, and help you understand how to align this choice with your broader wealth strategy.
Why Timing Matters More Than You Think
Let’s get this out of the way: Yes, age matters. But the month you claim matters too—and both can significantly affect your financial security later in life.
Here’s what you need to know:
- You can claim benefits as early as age 62, but doing so permanently reduces your monthly payout by up to 30%.
- Your “full retirement age” (FRA) is typically 66–67, depending on your birth year. Claiming at FRA means you receive your full scheduled benefit.
- Delaying beyond FRA earns you an 8% increase per year until age 70. That’s a 24–32% higher benefit compared to FRA—and nearly 77% more than claiming at 62.
What’s the catch?
Most people underestimate their longevity. If you’re in good health and come from a long-lived family, delaying may be the most valuable financial decision you make.
And remember: Social Security is one of the few income sources that adjusts for inflation every year—making it one of the most powerful hedges against longevity risk.
The Strategic Case for Waiting (And When You Shouldn’t)
If you’re still working or have other sources of income, waiting to collect Social Security might offer huge advantages:
- Maximizing Guaranteed Income: Every year you wait past FRA up to age 70, your benefit grows by 8%. No other investment offers that guaranteed return without market risk.
- Spousal and Survivor Benefits: Your decision affects not just you—but your spouse. A higher benefit today means a higher survivor benefit later.
- Tax Considerations: Social Security income can be partially taxable depending on your other income sources. Delaying benefits until lower-income years may help reduce your total lifetime tax bill.
- Asset Allocation Leverage: By delaying Social Security, you may be able to draw down other assets early—reducing future RMDs and increasing portfolio longevity.
When Taking It Early Might Make Sense
It’s not one-size-fits-all. Sometimes it does make sense to take benefits earlier:
- You’re in poor health or have a shortened life expectancy.
- You need income now due to cash flow needs.
- You’ve retired early and plan to draw benefits to avoid withdrawing from appreciated investment accounts during a down market.
The key is understanding your broader strategy—not just the break-even age.
A Comparative Look at Claiming Ages
Let’s look at three hypothetical scenarios, assuming a full retirement benefit of $3,000/month at FRA (age 67):
- Claiming at 62: You’d receive about $2,100/month— a 30% reduction.
- Claiming at 67: Full benefit of $3,000/month.
- Claiming at 70: You’d receive approximately $3,720/month— a 24% increase.
Over a 30-year retirement, the difference in cumulative benefits can exceed $200,000–$300,000. And that’s not accounting for cost-of-living adjustments or taxes.
Who Benefits Most from Waiting?
High earners with long life expectancies. Professionals with ample retirement savings who don’t need immediate income. And anyone looking to optimize for spousal support or longevity insurance.
FAQs About Social Security Timing
When is the best age to start collecting Social Security?
The best age depends on your health, marital status, retirement cash flow, and longevity expectations. Generally, waiting until 70 provides the highest lifetime benefit if you expect to live into your 80s or beyond.
Can I change my mind after I claim Social Security?
Yes, but only once. Within 12 months of claiming, you can withdraw your application and repay all benefits received. After that, changes are limited.
Is Social Security income taxable?
Up to 85% of your benefits may be taxable, depending on your combined income. Strategic tax planning can help minimize the impact.
What if I keep working after I claim?
If you claim before your FRA and earn more than $22,400 (in 2025), your benefits may be temporarily reduced. After FRA, you can earn any amount without affecting your benefit.
Does my spouse’s benefit depend on when I claim?
Yes. If your benefit is higher, your spouse may receive up to 50% of your FRA benefit while you’re alive and your full benefit as a survivor after your death. Delaying increases both.
Aligning Social Security with Your Bigger Picture
This isn’t a standalone decision. It’s a crucial piece of your retirement strategy.
At Truly Aligned Wealth, we model multiple Social Security scenarios as part of your overall financial plan—accounting for taxes, portfolio withdrawals, cash flow needs, and longevity risks. It’s not just about maximizing a benefit; it’s about aligning your income streams so you can live fully—without fear of running out of money.
Whether you’re five years from retirement or filing next month, now’s the time to zoom out, run the numbers, and choose intentionally.
Schedule a consultation or explore our Financial Planning and Investment Management services. Your future deserves a strategy that works as hard as you have.
Asset allocation does not ensure a profit or protect
against a loss.
This is a hypothetical example and is not representative
of any specific investment. Your results may vary.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through The Wealth Consulting group, a registered investment advisor. The Wealth Consulting group, WCG Wealth Advisors and Truly Aligned, INC are separate entities from LPL Financial.