When should I start Social Security? (Lesson 8)

Claiming at 62, 67 or 70, and what waiting does for Ray and Angie.

Lesson 8 · about 3 minutes · 8 pictures

This is an educational walkthrough using a fictional family. It is not financial advice, and the right answers for you depend on facts a lesson cannot know.

Watch this lesson (3 minutes) Opens YouTube in a new tab.

1.When should I start Social Security?

Title slide: “When should I start Social Security?” An eight-year window that permanently sets every check: a line from 62, early, 30% less, through 67, full, 100%, to 70, the most, 24% more. With portraits of Ray, 54, and Angie, 52.

Between age sixty-two and seventy, you have an eight-year window to start Social Security. Claim early, and every check is smaller for life. Wait, and every check grows. So when should you claim? As always: this is an educational walkthrough using a fictional family. It isn’t financial advice.

2.Three milestone ages

Three boxes for anyone born in 1960 or later. 62, the earliest age: 70% of your earned benefit, a permanent 30% cut. 67, full retirement age: 100%, the benchmark. 70, the most: 124%, 8% more for each year you wait. Waiting from 62 to 70 makes the monthly check over 77% larger.

For anyone born in 1960 or later, full retirement age is sixty-seven. That is when you receive one hundred percent of the benefit you earned. If you start at sixty-two, your checks are permanently cut by thirty percent. But if you wait until seventy, your check grows by eight percent every year you delay. At seventy, that is twenty-four percent more, every month, for life.

3.Ray and Angie’s earned benefits

Two tables. Ray, $25,000 a year at 67: claim at 62, $17,500 a year ($1,458 a month); at 67, $25,000 ($2,083 a month); at 70, $31,000 ($2,583 a month); a difference of $13,500 a year for life. Angie, $17,000 at 67: at 62, $11,900 ($992 a month); at 67, $17,000 ($1,417 a month); at 70, $21,080 ($1,757 a month). Together at 67, $42,000 a year.

Here are Ray and Angie’s numbers at sixty-seven. Ray’s full benefit is twenty-five thousand dollars a year. Angie’s is seventeen thousand. If Ray starts at sixty-two, his check drops to seventeen thousand five hundred. If he waits until seventy, it grows to thirty-one thousand dollars a year. That is a thirteen thousand five hundred dollar difference, every year, adjusted for inflation.

4.Stop working at 62 instead

The saved scenario “Stop working at 62 instead”: runs short when Ray is 67, after only five years of retirement. Why: permanently smaller checks, Ray $17,500 instead of $25,000 and Angie $11,900 instead of $17,000, $12,600 a year less for life; and three more years of living on savings, with no more 401(k) contributions and three years left on the $914-a-month mortgage.

In their plan, what happens if they stop working and claim at sixty-two? The app shows the result instantly. With smaller checks and three fewer years to save, their retirement savings run out when Ray is just sixty-seven. Claiming early to get money sooner can leave you with the smallest check right when you need it most.

5.Three levers brought them close

Recap of lesson 6. All three levers together: Mostly on track, holding in 83 of 100 simulated futures. Work two more years, Ray to 67 and Angie to 65: eleven more years of savings. Spend $500 a month less, $40,000 a year instead of $46,000: seven more years. Save $500 a month more, $6,000 a year: seven more years. How can they get from Mostly on track to On track?

In lesson six, three levers turned Ray and Angie’s plan around: working two more years each, Ray to sixty-seven and Angie to sixty-five, saving five hundred dollars more a month, and spending five hundred less. That brought them to mostly on track, holding in eighty-three out of one hundred market futures. But they wanted to know: how do we reach on track?

6.All three, and wait longer for Social Security

The saved scenario “All three, and wait longer for Social Security”: On track, holding in 92 of 100 simulated futures. All three levers from lesson 6, Mostly on track (83%) on their own, plus later claims: Angie claims at 67, $17,000 a year, and Ray waits to 70, $31,000 a year. From 70, $48,000 a year together, for life.

The answer combines all three levers from lesson six, working two more years each, Ray to sixty-seven and Angie to sixty-five, spending five hundred less, and saving five hundred more, with delayed Social Security. Angie claims her full benefit at sixty-seven, and Ray waits until seventy. Because Ray is the higher earner, his check jumps to thirty-one thousand dollars. That extra income pushes their plan all the way to on track, holding in ninety-two out of one hundred simulated futures.

7.Why waiting acts like longevity insurance

Three boxes. Paid for life: unlike investments, Social Security keeps paying as long as you live. Inflation-adjusted: checks rise with the cost of living every year, and a larger check rises by more dollars. Survivor protection: when one spouse dies, the survivor receives the larger of the two checks. Delaying the higher earner’s check is one of the strongest protections against a long life.

Why does waiting work so well? Social Security is retirement income that is paid for life, adjusted for inflation every year, and backed by federal law. And when one spouse passes away, the surviving spouse keeps the larger check. Delaying the higher earner’s benefit protects both of you into your eighties and nineties.

8.Your turn: test your claiming ages

Three steps: find your full retirement age and estimate at ssa.gov; open Ray and Angie’s Scenarios or your own plan; change the claiming age in the number box on the Plan page and watch your benefit and verdict update. Your plan stays private on your device. Education, not advice.

Now it is your turn. Log into Social Security’s website to find your full retirement age estimate. Then open your plan, or Ray and Angie’s demo, and change claiming age in the number box on the Plan page. See how much your check grows, and watch how it moves your verdict. Your plan data stays private on your device. This is education, not financial advice.

Try it

“Stop working at 62 instead” and “All three, and wait longer for Social Security” are saved there. Each spouse’s claiming age is a number box on the Plan page, under Household. Nothing you change there is saved, and it does not touch a plan of your own.

Open Ray and Angie’s Scenarios