This article is part of the Retirement Financial Life Equation (RFLE) series. It was initially published on May 6, 2017, and updated in December 2025.
I know quite a few people who have taken an early “traditional” retirement. By that I mean they were between the ages of 62 and their Full Retirement Age (FRA). They were relying on Social Security, retirement savings, possibly some part-time work, and perhaps a pension to provide the income they needed in retirement. A relatively common decision among them is to start receiving Social Security (SS) retirement benefits early, at age 62.
Other than the decision about when to retire, when to start taking SS retirement benefits—which come in the form of a lifetime inflation-protected annuity—is one of the most important financial decisions a retiree makes. Because you can start collecting reduced benefits at age 62, many choose to do so to help with an “early” retirement. But each year you wait, your benefit increases until it reaches your full benefit at your FRA. And your benefit can keep growing after FRA—by 8% per year—if you wait until age 70.
Almost everything I have read and studied on this subject suggests that most retirees should not start collecting benefits at age 62. Yet approximately 60% of eligible retirees do. I know that sometimes it’s out of necessity, but this divergence between expert opinion and common practice is both surprising and concerning.
I’ve analyzed the numbers carefully (both for my own situation and for readers), and I generally agree with the experts—collecting early is not the best decision in the vast majority of cases. But because everyone’s situation is different, that’s not true in every case. There is some straightforward analysis you can do to see what makes the most sense for you.
Full retirement age (FRA) [updated in 2025]
First, it’s important to understand what your Full Retirement Age is, because it’s shifting based on birth year:
- Born 1943-1954: FRA is 66
- Born 1955: FRA is 66 and 2 months
- Born 1956: FRA is 66 and 4 months
- Born 1957: FRA is 66 and 6 months
- Born 1958: FRA is 66 and 8 months
- Born 1959: FRA is 66 and 10 months
- Born 1960 or later: FRA is 67
For individuals turning 62 in 2025 (born in 1963), the full retirement age is 67. This means they’ll need to wait five full years from age 62 to reach their FRA, compared to just four years for those born before 1960.
Simple break-even analysis
The main data point typically used to analyze the potential advantage of delaying benefits is the “break-even point.” The break-even point is the age at which your cumulative income is the same when comparing two different claiming ages. The conventional wisdom is: If you think you’ll live longer than that age, it’s better to wait to receive your benefits. If you’ll live less than that age, it’s better to start earlier.
The main challenge, of course, is that only God knows how long we’ll live (Psalm 139:16). We may have some idea based on current health, family history, and the choices we’ve made, but ultimately, God determines how many years we’ll have on this earth. So the best we can do is make an educated guess and plan accordingly.
An example
Let’s look at a realistic example using 2025 benefit amounts. Say your Full Retirement Age benefit (at age 67 for someone born in 1960 or later) will be $2,000 per month, or $24,000 per year.
If you claim at age 62: You’ll receive 70% of your FRA benefit, or $1,400/month ($16,800/year)
If you wait until FRA (age 67): You’ll receive your full benefit of $2,000/month ($24,000/year)
If you delay until age 70: Your benefit will be 124% of your FRA benefit, or $2,480/month ($29,760/year)
Right away, we see a significant difference between taking benefits at age 70 versus age 62—approximately $12,960 per year higher, for the rest of your life. For some, that could be the difference between being able to pay bills comfortably or struggling financially in later life.
Here’s what this looks like in table form:
| Claiming Age | Monthly Benefit | Annual Benefit | % of FRA Benefit |
|---|---|---|---|
| Age 62 | $1,400 | $16,800 | 70% |
| Age 67 (FRA) | $2,000 | $24,000 | 100% |
| Age 70 | $2,480 | $29,760 | 124% |
Break-even points
The results of a break-even analysis of our example show:
- Claiming at 67 vs. 62: Takes approximately 12 years to break even, or until age 79
- Claiming at 70 vs. 62: Takes approximately 12.5 years to break even, or until about age 82
- Claiming at 70 vs. 67: Takes approximately 11 years to break even, or until age 81
That’s helpful information, but how should you interpret it? More importantly, how does it apply to your situation?
Considering spousal benefits
If you’re married, the numbers change somewhat. Under current SS rules, a non-working spouse (or a spouse with lower earnings) is entitled to up to 50% of their spouse’s FRA benefit.
Important note: The spousal benefit is calculated based on your benefit at FRA, not at age 70. So if you delay to 70, your own benefit grows by 8% per year, but your spouse’s benefit (50% of your FRA amount) doesn’t increase beyond what it would be at your FRA.
This changes the break-even analysis for married couples. While delaying still provides significant value—especially for survivor benefits—the advantage is somewhat reduced compared to single individuals.
Actuarial reality
According to the Social Security Administration and actuarial data, for a healthy 65-year-old couple:
- There’s approximately a 50% probability that at least one spouse will live to age 90
- There’s approximately a 25% probability that at least one will live to age 95
Let’s be conservative and assume that you or your spouse will live to age 90. If you started receiving benefits at FRA instead of age 62, that’s 11 years of benefits beyond the break-even point of age 79. The total additional benefit from ages 79 to 90 for a single person in our example would be $84,000 ($7,200 extra per year × 11 years).
If you waited until age 70 instead of 62, and lived to 90, you would receive an extra $12,960 per year for 8 years beyond the break-even point (age 82), totaling over $103,000 in additional benefits.
Here’s my reasoning: Better to believe you’ll live to age 90 and receive the larger payout during a time when you may need it most (due to the higher risk of running out of savings as you age) than to assume you won’t and take a lesser amount during a time when you’re better able to supplement it with savings. Taking benefits early can deplete your savings faster, possibly causing you to run out of money sooner than expected.
To be fair, break-even analysis alone isn’t sufficient to tell you what you should do. You may decide to intentionally “front-end load” your retirement income with early SS benefits in return for a reduced benefit later. Many want that income when they can be most active, realizing they may have less need for it later in life. Others simply don’t think they’ll live to age 90.
Thinking of Social Security as an investment
Another helpful way to think about Social Security is as an inflation-protected annuity from the government that you can choose to defer. It has some unique features: It pays for as long as you live, but doesn’t return principal at termination. Social Security is essentially an inflation-indexed lifetime annuity. If you die younger than expected, you receive less total benefit—that’s simply how annuities work. But the longer you live, the higher the effective return.
The investment return of delaying
Financial planning expert Michael Kitces points out that delaying Social Security creates an implicit rate of return, and over longer time horizons—when you may “need the money most” as you have more years of retirement expenses to cover—the return of delaying Social Security becomes quite compelling. In fact, the return is generally far superior to the risk-adjusted returns achievable over comparable time periods by available alternatives, whether investing in risk-free bonds, growth equities, or buying a commercially available annuity.
Dr. Wade Pfau, another retirement income expert, created an analysis showing the various rates of return for delaying benefits. Using our $2,000 FRA benefit example (adjusted for 2025), here’s approximately what the real (inflation-adjusted) returns look like:
If you delay from age 62 to FRA (67) and live to:
- Age 75: Negative return (you don’t break even)
- Age 79: Approximately 0% return (break-even point)
- Age 85: Approximately 3.5% real return
- Age 90: Approximately 4.5% real return
If you delay from FRA (67) to age 70 and live to:
- Age 78: Negative return
- Age 81: Approximately 0% return (break-even)
- Age 85: Approximately 3.0% real return
- Age 90: Approximately 4.2% real return
These are real, inflation-adjusted, tax-free returns that you can’t match with any other guaranteed investment.
As Pfau notes, you would take on significant market risk trying to achieve similar returns through stock market investments, and you could easily end up worse off.
My updated perspective (2025)
When I originally wrote this article in 2017, I was facing my own Social Security claiming decision. My wife and I were both approaching our FRA of 66. At that time, I was considering starting benefits at 66.
Looking back now with several years of retirement experience, and having updated my understanding with current data, here’s what I’ve learned:
For most married couples where both spouses have reasonable health and longevity in their families:
- The higher earner should seriously consider delaying until age 70
- This maximizes not only their own benefit but also the survivor’s benefit
- The lower-earning spouse might claim earlier (at FRA or even 62) to provide some immediate income
For single individuals in good health:
- Delaying to age 70 provides maximum lifetime income protection
- The 8% annual increase from FRA to 70 is essentially a guaranteed return you can’t find elsewhere
- This is especially valuable if you have limited retirement savings
For those with health concerns or limited life expectancy:
- Earlier claiming may make sense
- But don’t make this decision based on fear alone—get medical input
What about you?
Based on the data, unless you’re fairly certain that neither you nor your spouse will make it past age 79, it’s generally wise to delay benefits to at least your FRA and perhaps to age 70, unless you have other extenuating circumstances such as a serious health issue.
One of the best things about Social Security for those who don’t have substantial retirement savings is that it provides a guaranteed income that can reduce the pressure on those savings to cover living expenses. If you delay and thereby receive higher SS payments, you can inexpensively hedge “longevity risk”—the risk that you’ll outlive your money.
Maximizing benefits is particularly important for retirees whose majority of income comes from Social Security and who have no other guaranteed income sources. Social Security also functions as an automatic inflation hedge through annual Cost-of-Living Adjustments (COLAs). Finally, delaying makes your retirement portfolio much more robust against a wide range of risks, including market downturns, fraud, and cognitive decline in later years.
Current rules to remember (2025)
Earnings Limits if You Claim Before FRA:
- If you’re under FRA all of 2025: Benefits are reduced $1 for every $2 earned above $23,400
- In the year you reach FRA: Benefits are reduced $1 for every $3 earned above $62,160 (only counting earnings before the month you reach FRA)
- Starting the month you reach FRA: No earnings limit
Important: If you start benefits before FRA and continue working, some benefits may be temporarily withheld, but you’re not losing them permanently—your benefit will be recalculated at FRA to account for months when benefits were withheld.
Summary: Key considerations
When making this critical decision, consider these factors:
- Think strategically about your benefits. Social Security is an inflation-adjusted lifetime annuity that offers real, risk-free, tax-advantaged income for life. Compare it to other investments using this framework.
- Health and longevity matter. If you and your spouse are in reasonably good health and have longevity in your families, delaying to at least FRA—or even to age 70—can maximize your lifetime benefit and provide crucial protection in your later years when you may need it most.
- Consider your complete financial picture. If you have sufficient retirement income from savings, pensions, or other sources, delaying Social Security can provide maximum value. If you’re dependent on SS for most of your income, the decision becomes even more important.
- Don’t claim early just out of fear. Many people claim at 62 because they’re afraid Social Security “won’t be there” or they “might not live long enough.” These fears, while understandable, often lead to decisions that cost tens of thousands of dollars over a lifetime.
- Your situation may be unique. Current serious health conditions, family history of shorter lifespans, or immediate financial need may present valid reasons for claiming earlier. But these should be genuine exceptions, not excuses.
Finally, remember that while these are important financial decisions, your future is ultimately in God’s hands. Do what you can to make wise stewardship choices, gather good information, seek wise counsel if needed, and then trust God with the outcome.
Social Security claiming is one of the most important levers in the Retirement Financial Life Equation. Getting this decision right can mean the difference between financial peace and stress in your later retirement years.