When to Claim Social Security

If you plan to retire in the next few years, Social Security benefits could be one of your most important sources of retirement income.

To get the most out of Social Security, however, you need to think carefully about when to start claiming that monthly check. You can begin retirement benefits as early as age 62 or as late as age 70. The longer you wait, the larger your benefit will be. For instance, if you delay from 62 until 66, you might receive a monthly check that is some 33% bigger. This 33% increase is on top of any adjustments for inflation.

But should you delay claiming benefits? If you're single, the decision is relatively straightforward. If you doubt you will live beyond your 70s, you may want to claim benefits as soon as you retire. But if you think you will live into your 80s, you might want to delay, because you could receive a bigger monthly check for many years and that may compensate for the early years when you weren't receiving benefits.

If you are married, the decision is a little trickier, especially if you were the family's main breadwinner. The reason: If you die first and you had higher lifetime earnings, your spouse will likely receive your benefit as a survivor benefit. Thus, even if you are in poor health, you may want to delay Social Security, because your benefit could live on after your death.

Of course, many folks will find it tough to judge their own life expectancy and that of their spouse. What to do? That brings us to another reason you might delay benefits, whether you are single or married: Social Security shouldn't be considered just a monthly check. Rather, it can be viewed as insurance against the risk that you live a surprisingly long time and deplete your other assets. By delaying the start of Social Security benefits, you effectively buy yourself more of this insurance.

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