by Andrea Norris-McKnight

Those with a normal life expectancy typically are best to wait to claim Social Security benefits until full retirement age. But there are two situations in which you should collect as soon as you can. See if they apply to you.

Chances are you’ve thought about when to start collecting Social Security.

Should you withdraw it as soon as possible? Or is it better to wait?

We reached out to Jeff Nordin, CFP and founder of Core Financial Concepts for some good reasons to collect social security benefits as early as possible. Here’s what he had to say:

Q: When is it wise for an individual to begin thinking about their options regarding withdrawing their social security?

Mr. Nordin: A worker can start collecting Social Security benefits as early as age 62, as late as age 70, or at any age in between.

Certainly by age 60, one should have reviewed their Social Security benefits statement (can find through the Social Security Administration), understand their benefit amounts, and have begun thinking about the various benefit strategies.

Further, hopefully those contemplating retirement have been saving and investing for many years in a retirement fund that will also help provide the 75% of pre-retirement annual income they’ll most likely need in retirement.

Q: Is it ever advantageous to collect Social Security as soon as you can? And if so, what are some examples?

Mr. Nordin: The decision of when to start taking Social Security benefits should be driven by two primary factors: the need for income and life expectancy.

If one absolutely needs the income to live on, then starting benefits as soon as possible (age 62) makes sense. Further, one should consider starting benefits early if in poor health and unsure about how long they may live.

For reference, according to the Social Security Administration, average life expectancy for someone age 65 today is approximately 84 years for men and 87 years for women.

Q: Are there consequences for collecting Social Security early?

Mr. Nordin: Benefits are decreased if started before full retirement age (FRA), the age that the Social Security Administration uses to denote when one is eligible to receive their full Social Security benefits.

FRA used to be 65 for everyone. Now, for someone born between 1943 and 1954, FRA is 66 and for those born after 1960, FRA is 67 (a sliding scale is used for the years between 1954 and 1960).

If FRA is 66, and one starts benefits as early as possible at age 62, benefits are permanently reduced by 25% (the decrease shrinks each month one waits closer to starting at FRA).

Q: Are there circumstances where someone might be better served to wait, rather than taking out Social Security earlier?

Mr. Nordin: Benefits are increased by 8% each year one delays starting benefits past their FRA.

Age 70 is the latest an individual can start claiming Social Security benefits. For example, if FRA is 66, and one delays until age 70, benefits would be increased by 32% (4 years x 8%).

Q: Are there any issues that can come up that people may not be aware of (or people forget about) when they are preparing to withdraw Social Security early?

Mr. Nordin: Again, the decision of when to start taking Social Security benefits should be driven by two primary factors: the need for income and life expectancy. Amount of retirement savings, continuing to work, and being married are other factors. The need for income is fairly straightforward for one to answer.

The key to most accurately answering the life expectancy factor is to estimate “crossover” ages: the age where waiting to start benefits at FRA becomes more valuable than starting at age 62, and where waiting until age 70 is more valuable than starting benefits at FRA.

Unless one absolutely needs the income to live on, in most cases, the most valuable option for someone with a normal life expectancy is to wait to claim Social Security benefits until FRA, and most likely delay claiming benefits until age 70.

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Reviewed July 2023

About the Expert

Jeff Nordin is a Certified Financial Planner and founder of Core Financial Concepts.