One financial decision you will face as you approach Social Security age is when to begin your benefits. Your Social Security benefits are primarily determined by your earnings history, but they also depend on your birth year and the age at which you start claiming them.
Let’s explore the pros and cons of claiming Social Security early versus delaying your benefits.

First, your Full Retirement Age (FRA) is based on your birth year. For those born after 1960, it is 67 years old. This is when you would receive 100% of the benefit you’ve earned through your working years. However, you can claim Social Security as early as 62 or you can delay as long as age 70, with adjustments to your benefit amount based on when you claim.

Claiming Early
The main advantage of claiming Social Security at age 62 is that you can start receiving benefits sooner, potentially collecting a higher total amount early in retirement. However, the trade-off is that your monthly benefit will be reduced compared to what you would receive at Full Retirement Age. This option can be beneficial if you do not expect to live a long life. Generally, filing for benefits at 62 provides larger cumulative benefits until your early to mid-80s.

Delaying Benefits
If you choose to delay your benefits past your Full Retirement Age, your benefit will increase 8% per year until you turn 70. After age 70, there are no further increases, so there is no advantage to waiting longer. Delaying benefits means you’ll rely more on your portfolio from ages 62 to 70 to cover your expenses if you are retired. However, once you start receiving Social Security, it will ease the pressure on your portfolio, as you'll need to withdraw less from your investments.

Benefits for Married Couples
Delaying Social Security until age 70 can also benefit married couples. If the higher earner delays their benefit until age 70, their spouse can receive a larger benefit if the higher earner passes away first. This is known as a Survivor Benefit.

For example, if Spouse A received a $36,000 benefit at FRA, delaying until age 70 could increase it to about $45,000. If Spouse A passes away at age 71, Spouse B would receive the $45,000 benefit (assuming Spouse B’s benefit is less than $45,000) for the rest of their life. However, if Spouse A claimed benefits earlier at a reduced amount and then passed away, Spouse B would only receive the reduced benefit or their own benefit, whichever is higher.

Investment Considerations
One risk to delaying your Social Security benefit is that you will need to rely on other sources of income, such as investment income, to cover your retirement spending. This may be challenging depending on your investment account balances and spending goals. If the market is down during your early retirement years, it may significantly impact your ability to sustain spending throughout your life. Fortunately, even if you start taking IRA distributions with the intention of delaying Social Security, you can change your mind if the market is volatile. Social Security benefits grow every month they are delayed, so you can always decide to start your benefits if things go differently than you planned.

If you are wondering whether you should claim Social Security early or delay, reach out to your DCM advisor to help you weigh the pros and cons.


This article was featured in the Winter 2025 edition of the Rising Dividend Report.

Read more articles from this issue here.