When Is the Best Time to Start Collecting Social Security Benefits?

Trying to work out when to take Social Security can be a puzzle. The "full" retirement age is currently set at 67 years old, but you can begin collecting Social Security benefits as early as the age of 62 or delay taking benefits until you turn 70. There are arguments for starting early, going with your full retirement age or waiting, so you'll want to think through which is right for you. 

Deciding when you begin collecting benefits will affect your Social Security monthly payments, and that could impact financial decisions for the rest of your life. And when you consider other factors, like the annual COLA increase, trying to figure out when is the best time for you can be challenging. 

Ultimately, your own financial situation will play a large role in when you retire. Examining your current assets, like your 401(k) and other investments, can allow you to get a better scope of when the right time to retire is. And of course, when in doubt, talk with a financial adviser. Below, we'll go over some factors that you should consider when determining the time you should begin collecting benefits.

For more, don't miss how to change your Social Security number if you need to and how to request a replacement Social Security card.

How are Social Security benefits calculated?

To calculate your Social Security benefits for when you retire, the Social Security Administration takes the average monthly earnings from up to 35 years of your work history. This average is your "primary insurance amount," which is what you can expect to receive when you reach the full retirement age. The current full retirement age is 67 if you were born in 1960 or later. Those born before 1960 hit full retirement age a few months earlier.

The calculation includes income up to the taxable maximum amount, which was $168,600 for 2024 and $176,100 for 2025. 

The Social Security Administration will then choose your working years with the highest earnings -- taking inflation into account -- and then take the sum of those earnings and divide it by the total number of months worked during those years to create an average that is rounded down to the next lower dollar amount. 

Your calculated earnings are indexed so that future benefits are adjusted cost of living to help offset inflation. This number is calculated to determine your monthly benefit amount. For 2024, the maximum Social Security benefit for someone at full retirement age is $3,822. 

If you are married or were previously married to someone who contributed to Social Security through taxes, in specific situations you might be eligible to claim part of those benefits. 

If you're confused about how your monthly benefit payments will be calculated when it's time for you to retire, the Social Security Administration offers up a very simple and easy-to-use calculator to estimate your benefits.

When should you start collecting Social Security benefits?

The time you decide to collect Social Security benefits is a personal decision and depends on multiple factors, including the state of existing finances. The longer you wait to collect benefits, the more you can expect to get, but you have fewer years to collect them. You can start earlier and get a smaller check but over more years. 

To help start thinking about it, Katherine Tierney, senior retirement strategist of client needs research at financial services firm Edward Jones, suggests asking yourself these questions: When do you want to retire and when can you afford to retire? 

These two questions will play major roles in your answer. You should consider the lifestyle you want during your retirement, of course, and weigh that against all the money you have saved, including in your 401(k). Will you have a pension or plan to take up a part-time job for additional income? Of course, your own health and life expectancy are factors that can't be ignored, either. And if you have a spouse who will also take Social Security, you may want to consider that too.

Wait for a bigger payout? Or retire early and get a smaller check?

If you're nearing retirement age, this is a question that may be weighing on you. 

"Social Security can act as insurance against living longer than you anticipate, and it provides some inflation protection since your benefit is adjusted for cost-of-living increases," Tierney said. "The longer you or your spouse expect to live, the more it may make sense to wait to claim your Social Security benefit."

But just because you decide to wait to claim your benefits doesn't mean you have to delay your retirement, she explained. However, you should make sure you've got income coming in from your 401(k) or other investments so you can afford your living expenses if you delay claiming your benefit. 

However, if you're solely relying on Social Security benefits to pay for your expenses in retirement, waiting to retire and claiming your benefits at a later date could be a better choice. You'll receive more money each month and you'll have more time to save for retirement.

Also, if you choose to retire early, your benefits will be reduced for each month before full retirement age. For instance, if you were born in 1960 or later and retire at age 62 with a retirement benefit of $1,000 per month, your payment would be reduced to $700 (or a 30% reduction). 

On the plus side, that's still $700 you would otherwise not receive during that time if you didn't draw your Social Security benefits. So you might benefit from collecting payments over a longer period of time. 

If you retire early, could you run out of money?

When you apply for Social Security benefits, you'll receive them for life, unless you manage to lose them, but the funds suddenly won't run out. 

Instead, you could exhaust your 401(k) or other retirement savings. To guard against that, you can take steps by being conservative with your withdrawals if you retire early, Tierney says. 

She recommends regularly monitoring your spending and 401(k) withdrawal rate so as to not outlive your own assets. Skipping on an annual spending increase or reducing your spending can help you avoid burning through your savings, and even more so when inflation is high. 

For more, don't miss the Social Security payment schedule and how to apply for Social Security benefits.