Planning for retirement involves many considerations, one of the most important being is the question of when to start drawing Social Security. Depending on your birth year, your retirement age—that is, the age at which you'll be eligible to receive the full amount of Social Security benefit—ranges from 66 to 67. But you also have the option to file for Social Security early or later.

Early vs. Late Filing 

Early withdrawal of Social Security results in a permanent reduction of your benefits. If you start drawing at age 62, for example, your monthly payments will be permanently reduced by up to 30 percent.

If you delay getting benefits, on the other hand, you will receive a “delayed retirement credit” or permanent increase in payments. By waiting until age 70, you could receive up to 132 percent of your benefits amount.

By waiting, you will also experience a later break-even point—that is, the age at which you’ll have received the same amount of benefits as if you’d started drawing at full retirement age. After that point, you’ll come out ahead. 

Factors to Consider 

So, how do you decide which Social Security strategy is best for your situation? Of course, there is no one-size-fits-all solution. But here are a few things to consider:

  • Your health condition: If you’re in great health, it might make sense to delay getting benefits as long as you can, maximizing your benefit over a longer lifespan. If you’re suffering from medical conditions that make it difficult to work or shorten your lifespan, however that may be enough to justify early withdrawal.
  • Your financial resources: If you have other sources of income or financial reserves, consider holding off on Social Security until it becomes necessary.
  • Your income: Your Social Security payments may be taxed—potentially up to 85 percent. The amount depends on your modified adjusted growth income, which is your adjusted gross income plus half your Social Security payments and any nontaxable interest payments.
  • Your spouse: Your spouse’s retirement age, health condition and earning history should factor into your decision. If you’re both working, you should run the numbers to determine what strategy will maximize your benefits.

Some retirees opt to take benefits early because they’re afraid that the Social Security system might change or run out of funds. However, as it currently stands, the system has sufficient funds to cover benefits through 2034. That concern alone shouldn’t determine your strategy.

Looking at the Big Picture

For many people, Social Security is just one piece of the retirement puzzle—albeit an important one. Consider speaking with a financial advisor to ensure that you have all the right pieces in place.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This article originally appeared on April 20, 2019 in the Pioneer Press. You may view the article here.

Bruce Helmer

Bruce Helmer

Co-Founder, Financial Advisor and Author, Speaker and Host of the "Your Money" Radio Show

Series 7 & 63 Securities Registrations,1 Series 66 Advisory Registration, † Insurance License Bruce has been in the financial services industry since 1983 and is one of the founders of Wealth Enhancement Group. Since 1997, he has hosted the “Your Money” radio show, a weekly program that focuses on delivering financial advice in a straightforward, jargon-free manner. Bruce also hosts with the "Mid-Morning" crew on WCCO-TV each Tuesday morning to...Read More