Claiming Social Security is one of the most important income decisions you’ll make in retirement—and it’s one many people make too quickly. The moment you become eligible, it can be tempting to file simply because the benefit is available. For some people, that choice makes sense. But others later realize that waiting could have significantly increased their lifetime income. Before you decide when to start taking Social Security, it’s important to understand how timing affects your benefit. Here are three key factors to consider before you file.

First, When Will You Begin Taking Social Security Income?

Many people claim Social Security earlier than necessary, often based on incomplete or incorrect information. Concerns about Social Security’s future are common, but misunderstandings about how benefits work also play a role.In one survey, 73% of respondents knew that their filing age affects the maximum benefit they can receive, but only 21% knew the age at which they qualify for their full retirement benefit.¹ 

Although benefits can begin as early as age 62, filing at that age is considered early filing. There are valid reasons for early filing, but the trade off is a permanent reduction in benefits, which can sometimes be substantial.One common misconception is the belief that benefits will automatically increase to the full amount once a person reaches full retirement age (FRA). In reality, monthly benefits do not reset or adjust upward simply because a person has reached FRA. 

Just as important, many people who file early may not need the income right away. Today, more people continue working beyond traditional retirement ages—often because they enjoy the work or want to stay active.² Others retire with additional income sources that can support their lifestyle, reducing the need to claim Social Security as soon as they’re eligible.

Second, How Delaying Social Security Income Can Benefit You

You might be thinking, “If I don’t start taking Social Security, I could be missing out.” Not necessarily. If you’re able to hold off on taking your Social Security income, it can literally pay off.

Today’s FRA is 67,³ and at that age, your Social Security benefit is paid at its full amount, without any reduction for early filing. As the bar chart below shows, claiming benefits earlier (such as at age 62) results in a permanently lower monthly payment, because those benefits are expected to be paid over a longer period of time. By contrast, waiting until FRA means fewer years of payments, but at a higher monthly amount.

If you delay claiming beyond FRA, your benefit can actually grow.

For each year you defer—up to age 70—the Social Security Administration increases your benefit by 8%. The longer it’s deferred, the greater the benefit. A larger monthly benefit is appealing on its own, but for many investors, the more compelling reason to delay is how a higher benefit can improve long term retirement security.

Thanks to advances in medicine and technology, and the adoption of healthier lifestyles, we’re living longer. For a couple who are 65 today, there’s a 50% chance that one person will be alive at 92.⁴ It’s encouraging to know that life expectancy is up, but living longer will cost more—maybe a lot more.

A 65-year-old retiring today could spend $172,500 on healthcare expenses in retirement.⁵ This can dramatically raise your risk of running out of money. But delaying your Social Security benefit to ultimately receive more monthly income can help prevent healthcare expenses from eroding your retirement savings.

Third, How Delaying Social Security Income Can Benefit Your Spouse

Delaying Social Security may boost your benefit and may increase your spouse’s benefit, too.

When you file for your Social Security benefits, your spouse may be eligible for a spousal benefit if you’re the higher earner and vice versa. It can’t be claimed until the higher-earning spouse files, which they must do before the lower-earning spouse.⁶ The maximum spousal benefit is 50% of the higher earner’s benefit and is capped at their FRA. Let’s see how it would work for a couple who’ve been married for 10 years, Evelyn and Alex.