When Should I Start Collecting Your Social Security?

 In Social Security


When should I start collecting Social Security?


The answer depends on your health and financial situation. Given the complications of this question, I consulted with Nora Yousif, a financial planner with RBC Wealth Management. Here’s her response:

As people begin to approach retirement, one of the most commonly asked questions is “when should I start collecting my Social Security check?” In this post, we’ll look at a usual case. In future posts, we’ll examine more unusual situations.


Case I: Average health, decent gene pool

In most cases, it is probably best to wait until your Full Retirement Age (FRA), which currently is changing. It is 67 for people born in 1960 or later, but a bit earlier for people born before that age. The Social Security Administration provides a calculator to determine your FRA if you were born before 1960 here.

Keep in mind that the latest a person can hold off is the age of 70. This contrasts with what most Americans do, which is collect as soon as possible at the age of 62, which means they collect a reduced benefit amount. The longer you hold off taking your Social Security retirement benefits up to age 70, the higher your monthly check (or direct deposit).

When Social Security was originally set up in the 1930s, Americans were only expected to live 12 years in retirement. As we all know, Americans are living longer than ever before. Actuary tables, the insurance industry, and financial advisors like myself have all accounted for that when doing retirement planning with clients, but Social Security has a ways to go.

Waiting until age 70 to begin drawing on your benefits could potentially put more dollars in your pocket. Let’s look at an example – we’ll call her Sally. Sally is in average health and is trying to optimize her cumulative lifetime benefit. If Sally lives past 79 years of age (assuming her FRA is 67), she will have made the right decision to hold off and start collecting at age 70, rather than start collecting her Social Security benefit early, at the age of 62.

This is because by the time Sally reaches age 79, she will have received, in increased Social Security benefits, as much as she would have foregone by not drawing on her reduced benefits beginning at age 62. If Sally’s benefit would have been $750 a month at age 62, she would receive $1,320 a month if she waited until age 70. While it would take her until age 79 to make up the loss of $750 a month for eight years, the additional $570 she would receive during her 80s and 90s would be gravy.

Nora Yousif

This post is provided by Nora Yousif, a financial planner with RBC Financial Management. If you have any further questions, please reach out to Nora. She has offices in Boston, Easton, Wellesley, Norwell, Danvers, & Providence and can be reached at 508-230-8960/Nora.yousif@rbc.com.

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