When Should You Claim Social Security? Why Waiting Often Pays

‍Deciding when to claim Social Security is one of the most important retirement decisions you will make.

You can generally begin collecting retirement benefits as early as age 62, wait until your full retirement age, or delay benefits as late as age 70. The decision can permanently affect the amount of income you receive for the rest of your life.

At North Sister Wealth, we generally recommend that clients consider waiting until at least full retirement age before claiming Social Security, assuming their health, cash flow, and overall financial plan allow them to do so.

There are certainly exceptions. Poor health, reduced life expectancy, an immediate need for income, or unique family circumstances can make claiming earlier appropriate.

But for financially secure retirees, Social Security shouldn’t necessarily be viewed as money you need to collect as soon as it becomes available.

Instead, we believe it can be helpful to view Social Security as one of the most valuable sources of guaranteed lifetime income available in retirement.

Understanding Your Social Security Claiming Options

Your full retirement age, or FRA, is the age at which you’re eligible to receive 100% of your calculated Social Security retirement benefit.

For anyone born in 1960 or later, full retirement age is 67. For those born earlier, FRA ranges from age 66 to 66 and 10 months depending on birth year.

You can claim as early as 62, but doing so permanently reduces your monthly benefit. Conversely, delaying beyond full retirement age increases your monthly benefit until age 70. There is no additional benefit for waiting beyond 70.

Consider someone with a full retirement age of 67 who is entitled to $3,000 per month at FRA:

Claiming Age

Approximate Monthly Benefit

62

$2,100

67

$3,000

70

$3,720

In this example, waiting from age 62 until age 70 results in a monthly benefit roughly 77% higher.

Of course, the person who claims at 62 receives eight additional years of payments. That’s why the decision can’t be made simply by comparing monthly checks.

Why We Generally Don’t Recommend Claiming at 62

There is a natural temptation to claim Social Security as soon as you’re eligible.

You’ve paid into the system for decades. Why not start getting your money back?

The problem is that claiming early locks in a substantially lower benefit.

For someone whose full retirement age is 67, claiming at 62 generally results in a benefit approximately 30% lower than waiting until FRA.

That reduction becomes particularly important if you live well into your 80s or 90s.

For retirees with meaningful investment assets, Social Security can serve an important role that a traditional investment portfolio cannot perfectly replicate: an income stream designed to last for life.

That’s why we often think about delaying Social Security as a form of longevity protection.

Why Full Retirement Age Is an Important Milestone

We generally view full retirement age as an important starting point in the claiming conversation.

By FRA, you avoid the permanent early-claiming reduction.

You also eliminate the Social Security retirement earnings test. Before FRA, Social Security may withhold benefits if you’re working and earning above certain limits. Once you reach FRA, earnings no longer cause benefits to be withheld under the earnings test.

For 2026, someone who remains below FRA for the entire year can earn up to $24,480 before the earnings test begins applying. In the year FRA is reached, a higher $65,160 limit applies to earnings before the month FRA is reached.

For someone who is still working in their 60s, this can be another reason claiming early may not make sense.

Why Waiting Until 70 Can Be Even More Powerful

Reaching full retirement age doesn’t necessarily mean you should immediately claim.

For every month you delay beyond FRA, Social Security provides delayed retirement credits until age 70.

For someone born in 1960 or later, waiting from age 67 until age 70 increases the retirement benefit to approximately 124% of the FRA benefit.

Going back to our example:

Age 67 benefit: $3,000 per month

Age 70 benefit: $3,720 per month

That’s an additional $720 per month, or $8,640 per year, before considering future cost-of-living adjustments.

But there is another important benefit.

A Larger Benefit Also Means a Larger Base for Future COLAs

Social Security benefits receive periodic cost-of-living adjustments, or COLAs.

That means delaying Social Security doesn’t simply provide a larger benefit at age 70. The claiming adjustment is incorporated into the benefit calculation as future COLAs are applied.

Imagine two retirees.

One starts with a $2,100 monthly benefit.

The other starts with $3,720.

Future percentage increases are being applied within the benefit formula to two very different starting benefit levels.

Over a retirement that lasts 20, 25, or even 30 years, that difference can become meaningful.

This is one reason we believe Social Security claiming should be evaluated through a lifetime income lens, rather than simply asking how quickly you can get your money back.

Think About Social Security as Longevity Insurance

One of the most common ways people evaluate Social Security is through a break-even calculation.

The question becomes:

“How old do I have to live before waiting pays off?”

That’s useful information, but it doesn’t tell the entire story.

Retirement planning isn’t only about maximizing expected dollars. It’s also about protecting against outcomes that could significantly damage the plan.

One of the biggest risks in retirement is simply living longer than expected.

If you claim early and die at 72, claiming early may have produced more cumulative benefits.

But what happens if you live to 92?

Or 97?

Or 102?

At those ages, a significantly larger inflation-adjusted Social Security benefit can become extremely valuable.

You don’t buy homeowners insurance because you expect your house to burn down.

Similarly, delaying Social Security can be thought of partly as insurance against the financial risk of living a very long life.

What About the Social Security Trust Fund Running Out of Money?

This is one of the most common concerns we hear:

“Shouldn’t I claim Social Security now before the system runs out of money?”

The concern is legitimate. Social Security does face a significant long-term funding shortfall.

According to the 2026 Social Security Trustees Report, the Old-Age and Survivors Insurance Trust Fund is projected to be able to pay 100% of scheduled benefits until the fourth quarter of 2032.

If Congress made no changes, reserves would then be depleted and continuing program income would be sufficient to cover approximately 78% of scheduled benefits.

That’s an important distinction.

Social Security is not projected to simply disappear in 2032.

Payroll taxes and other program income would continue coming into the system. The issue is whether the program can pay 100% of currently scheduled benefits, not whether Social Security suddenly stops paying benefits altogether.

Should You Claim Early Because of the Social Security Shortfall?

Generally, we don’t believe fear about the Social Security trust fund should be the primary reason to claim benefits early.

It can be tempting to think:

“I’ll take my money at 62 before benefits get cut.”

But that decision creates its own risk.

Claiming at 62 permanently reduces your scheduled benefit relative to waiting until FRA.

If future legislation were ultimately to reduce benefits, you could potentially be applying that reduction to an already smaller benefit.

That doesn’t mean Congress won’t make changes to Social Security. It almost certainly means Social Security’s finances will continue to be an important policy issue.

Congress has several potential levers available, including changes to payroll taxes, the amount of earnings subject to Social Security tax, retirement ages, benefit formulas, or some combination of approaches.

We don’t know exactly what Congress will do.

For younger workers, it can be reasonable to model future Social Security somewhat conservatively.

For someone approaching retirement today, however, we generally would not recommend permanently reducing a Social Security benefit simply because of uncertainty surrounding the trust fund.

Social Security’s funding problem should be part of the planning conversation, but it shouldn’t automatically dictate the claiming decision.

When Claiming Early Can Make Sense

There are absolutely situations where claiming before full retirement age may be appropriate.

The most obvious is health and life expectancy.

If someone has a serious health condition or significantly shortened life expectancy, waiting years for a larger benefit may not make financial sense.

Other considerations include:

Immediate cash flow needs. If Social Security allows someone to meet essential expenses or avoid taking on debt, claiming earlier may be appropriate.

Limited retirement assets. Not everyone has sufficient portfolio assets to comfortably bridge the years between retirement and Social Security.

Employment circumstances. Job loss or an unexpectedly early retirement can change the calculation.

Spousal and survivor planning. Married couples should generally evaluate their Social Security decisions together rather than independently.

The important point is that claiming early should ideally be a deliberate planning decision, rather than simply the default because you turned 62.

Married Couples Need to Think Differently

For married couples, Social Security planning becomes even more important.

Instead of asking:

“When should I claim?”

We often want to ask:

“How do we maximize Social Security across both lifetimes?”

One strategy can be to prioritize delaying the benefit of the higher-earning spouse.

This is particularly important because the surviving spouse can generally receive the higher of their own eligible benefit or the applicable survivor benefit.

Delaying the higher earner’s benefit can therefore potentially increase the income available to the surviving spouse later in life.

For a married couple, Social Security isn’t simply about maximizing income today.

It’s also about protecting the spouse who lives the longest.

Your Investment Portfolio Changes the Decision

For financially secure retirees, Social Security shouldn’t be analyzed separately from the investment portfolio.

Imagine a retired couple reaches age 65 with a substantial investment portfolio.

They have two broad choices.

They could claim Social Security and reduce portfolio withdrawals.

Or they could temporarily withdraw more from their investments and allow Social Security to grow.

Spending portfolio assets while voluntarily delaying Social Security can initially feel backwards.

But economically, you’re making a trade.

You’re using a portion of your liquid investment assets today in exchange for a potentially larger guaranteed lifetime income stream later.

For retirees with substantial assets, that can be an attractive trade.

Delaying Social Security Can Create a Valuable Tax Planning Window

Another potential benefit of delaying Social Security has nothing to do with Social Security itself.

It can create a tax planning window.

Consider someone who retires at 65 but delays Social Security until 70.

Their earned income has stopped.

Social Security hasn’t started.

Required minimum distributions may not have started yet either.

That can create several years where taxable income is unusually low.

Those years may provide opportunities for strategies such as:

Roth conversions

Moving money from a traditional IRA to a Roth IRA while intentionally filling lower tax brackets.

Capital gain realization

Recognizing long-term gains during years when taxable income may be lower.

Portfolio rebalancing

Making strategic changes to taxable investments while managing the tax impact.

Strategic IRA withdrawals

Taking distributions earlier than required when doing so may reduce future RMDs and lifetime taxes.

The goal isn’t simply to minimize taxes in one particular year.

It’s to coordinate Social Security, IRA distributions, Roth conversions, capital gains, and eventually required minimum distributions to potentially reduce taxes over the course of retirement.

For higher-net-worth retirees, this planning opportunity can sometimes be more valuable than the Social Security break-even calculation itself.

Don’t Forget About Medicare

One important distinction:

Delaying Social Security does not necessarily mean delaying Medicare.

Medicare eligibility generally begins at age 65. Depending on whether you or your spouse are still working and the type of employer coverage you have, delaying Medicare enrollment can potentially create penalties or coverage issues.

Social Security specifically cautions people who delay retirement benefits to separately consider Medicare enrollment at age 65.

The two decisions should be coordinated, but they aren’t the same decision.

So, When Should You Claim Social Security?

There isn’t one claiming age that’s right for everyone.

But our general framework is fairly straightforward.

If you’re healthy, have sufficient assets to fund your lifestyle, and don’t have a compelling reason to claim early, we generally prefer to at least reach full retirement age before claiming Social Security.

From there, we evaluate whether delaying further, potentially all the way to age 70, makes sense.

The stronger the longevity outlook, the larger the investment portfolio, and the more valuable the potential survivor benefit, the more attractive delaying can become.

Conversely, significant health issues, reduced life expectancy, or immediate income needs can tilt the decision toward claiming sooner.

Concerns about Social Security’s long-term funding should also be incorporated into the analysis, but we generally don’t believe fear of the trust fund running out should drive someone to permanently reduce their benefit by claiming early.

The Bigger Picture

Social Security shouldn’t be viewed as an isolated government benefit.

It’s one component of your retirement income plan.

The right claiming strategy should be coordinated with your investments, taxes, required minimum distributions, Roth conversions, Medicare, spousal benefits, survivor benefits, and estate plan.

For many financially secure retirees, the question isn’t:

“How quickly can I start collecting Social Security?”

A better question is:

“How can I use Social Security to create the strongest lifetime retirement income plan?”

That’s ultimately what the claiming decision should be designed to accomplish.

This material is for educational purposes only and should not be considered individualized investment, tax, or legal advice. Social Security rules and individual circumstances vary. Consult with your financial, tax, and legal professionals regarding your specific situation.