As an American citizen who has earned wages, you’re eligible to begin receiving Social Security benefits as early as age 62. However, if you delay your first payment, your monthly benefit will increase, reaching its maximum at age 70. Somewhere between 62 and 70 you’ll reach your Full Retirement Age (FRA), which is based on your birth year. FRA is important because the Social Security Administration (SSA) typically bases your reported benefit amount based on that age. This is what the SSA calls Primary Insurance Amount, or PIA. The PIA also determines the benefit your spouse could receive before or after your death.
How taking early or late affects your spouse
When considering taking Social Security early, you may want to think about how it might affect your spouse. A spouse may be eligible to receive up to 50% of your PIA, but only if they claim at their own FRA. If either of you claims early, the spousal benefit will be reduced accordingly. Also, spousal benefits are based on your PIA and do not include any delayed retirement credits you earn by waiting past your FRA.
Survivor benefits work differently. If you claim early and pass away, your surviving spouse generally receives the reduced amount you were receiving. But if you delay benefits beyond your FRA, your survivor may receive up to 100% of your higher, delayed benefit — including any delayed retirement credits — subject to SSA rules pertaining to the surviving spouse.
Longevity is the key factor
A key consideration is longevity—how long you expect to live. If you don’t live long after claiming benefits you might receive less over your lifetime. Conversely, starting too early and living a long life could lock you into reduced payments for decades. So, what’s the right move?
Let’s consider those born on September 1963, turn 62 this year after September 1st. Their FRA is 67. Starting benefits at 62 and one month—the earliest allowed—results in a 30% reduction from PIA. Waiting until 70 yields a 24% increase (8% per year). SSA’s full table is here.
If they claim at 62 and live to 78, they’ll receive 16 years of benefits at 70% of PIA—totaling 11.2 years’ worth. Claiming at 67 yields 11 years at 100%, or 11 total. Waiting until 70 gives 8 years at 124%, or 9.9 total. In this case, starting at 62 or 67 gives nearly the same outcome, while waiting until 70 means missing more than a full year of PIA.
If they live to 80 the differences narrow even more:
- 62: 18 years × 70% = 12.6 years
- 67: 13 years × 100% = 13 years
- 70: 10 years × 124% = 12.4 years
The differences are modest unless they live well beyond average life expectancy. For those who live into their 90s, waiting can result in over five years’ worth of PIA because of the extra credits.
Ultimately, since no one knows how long they’ll live, the decision comes down to personal factors: current income needs, health, family history, lifestyle, taxes and risk tolerance. Some people are comfortable starting early, accepting lower payments in exchange for peace of mind. Others prefer to wait, betting on longevity and maximizing their future benefits.
Investing the Benefits
Some people, thanks to savings or family wealth, don’t need their Social Security right away. They often choose to wait until 70 to receive the largest possible benefits, which they then invest alongside their other assets.
Investing your Social Security benefits can significantly boost their value over time. For example, someone who starts benefits at 62 and simply puts the money in a no-interest checking account will receive the equivalent of 14 years of PIA by age 82 (20 years × 70%). But if those benefits earn a 2% real return annually, that total amount during those 20 years goes up by more than three years’ worth of PIA.
So does it matter if you plan to invest your benefits? Absolutely. If benefits aren’t spent but invested, starting earlier is often the better option because the breakeven point (the age after which having waited would have been the better move) is pushed out further.
This makes intuitive sense: Early payments have more time to grow through compounding. For example, if someone lives to 80, the difference between starting early or late is minimal, as we saw earlier. But at a 2% real return, that point of indifference goes up to 83. At 4%, it moves to 87. That means investing your benefits makes early claiming increasingly the better choice, especially when investing in U.S. Treasuries or high-quality bonds held to maturity that minimize or even eliminate the introduction of market risk.
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