9142 / When should an individual claim Social Security benefits?

The earliest date that an individual can begin claiming Social Security is age 62, and the latest is when the individual reaches age 70. Full retirement age has historically been age 66 for people born between 1943 and 1954, but will gradually increase with time so that for individuals born after 1960, full retirement age is 67. For individuals born between 1954 and 1960, full retirement age is somewhere between 66 and 67 based on the actual date of birth.

Determining when to claim Social Security benefits requires a detailed personalized calculation that often results in different answers for different clients. The conventional rule is that the longer a client can wait to claim Social Security, the better. This is because a client’s Social Security benefit level will increase by 8 percent for each year the client delays claiming benefits beyond full retirement age, and claiming benefits early will actually lead to a reduction in benefits. However, this rule will not work perfectly in all circumstances.

Clients must also consider past health issues and their impact on anticipated life expectancy in determining whether waiting until after age 70 to claim benefits is advantageous. The date at which the client intends to retire is also relevant. Clients who wish to keep working until age 70
may be best served by adhering to the traditional approach in delaying Social Security for as long as possible. For those clients who wish to retire early, however, claiming benefits early may actually enable them to make better use of their hard-earned retirement dollars by using Social Security to fund the bulk of their living expenses while retirement funds continue to grow on a tax-preferred basis.