The decision about when to begin taking benefits may differ, depending on whether you are married or single. If you are single, the decision is much less complex than it is if you are married:

Single The decision about when to take benefits will only directly affect you, not your heirs. In most cases, unless you have health issues that could affect your longevity, it makes sense to hold off on taking your benefits until you turn age 70, especially if you have a history of longevity in your family.

Realizing the Advantages of Waiting
In the following two examples, we compare the financial impact of decisions about Social Security for one coupleJohn and Jessica, both currently age 61. Every couple's situation will be different, so this example and its assumptions are for illustrative purposes only.

John makes $84,000 a year; Jessica earns $53,000 a year.
John passes away at age 83; Jessica passes away at age 95.

Different goals, different outcomes

The outcomes for John and Jessica are very different, depending on the goals they set for their retirement. In the second scenario, the total benefits are greater, because the couple will receive higher benefits from Social Security in their 70s and 80s if they delay taking them in their 60s.

The important lesson is that they know what their situation will be before they retire; they have a clear understanding of their goals and how their benefits-claiming strategies can affect the value of their total payments received over their lifetimes. "Your Social Security benefits can be a significant source of income when you need them," Fahlund says. "And that's why it's so important to plan ahead and understand your options."

Married The decisions you make as a couple may result in a significantly different financial outcome for both of you later in retirement. The most important guideline to understand is that when the first spouse dies, the surviving spouse receives the larger of the two spouses' benefits and is not eligible to continue receiving both. Therefore, generally speaking, it makes sense for the higher-wage-earning spouse to delay taking his or her Social Security benefits until age 70, when this benefit will be the largest it can be.

Identifying an optimal strategy for receiving an income stream from Social Security—well ahead of your anticipated retirement—can help you maintain your quality of life. There are many tools available to help you understand how to maximize your income from Social Security. But these tools often disregard important factors such as when the money will be needed most.

Calculating Your Social Security Income The T. Rowe Price Social Security Benefits Evaluator can help you determine your primary goal for this income and suggest a strategy that may work well for you in terms of taking your benefits.

While maximizing benefits is a valid strategy for many people, there may be cases where it is not the best approach. "Investors have different needs—and we recognize that," Fahlund says. "With the new T. Rowe Price tool, we allow you to compare the financial outcomes under several different scenarios, so you begin to understand what may be most effective in your situation." You might need income from Social Security as soon as possible—to help cover medical costs, for example—or you might benefit more by deferring filing for Social Security benefits while you continue working either full time or part time. This action will enable you to increase your income from Social Security throughout your retirement years. The important point to consider: Your choice of when to start taking Social Security benefits can affect your quality of life for many years to come.

Remaining in the workforce after you turn age 62 can help fill any income gaps and cover health insurance premiumsand may enable you to delay applying for Social Security.

It is generally a good idea to avoid collecting Social Security benefits until you reach your full retirement age, which is age 66 for most boomers. Your benefits will never go down from working longer; they are always based on your top 35 earning years.

Working full time has additional benefits.

  • The majority of retirees today would likely come out ahead over the long term by continuing to work full time for even a year or two beyond their original planned retirement date.
  • A couple staying in the work force until age 66, for example, could increase their annual combined retirement income from Social Security and investment withdrawals by more than 30% over what they'd receive at age 62, even without any additional contributions to their retirement plans.
  • Continuing to draw a salary and receive benefits would help cover your expenses during that time, your investments could continue to compound, and by shortening the time you'll need to draw on your nest egg—even if it's only for a few years—you can increase the odds of a successful retirement.
1Your savings rate depends on your age and the current size of your nest egg.
2Christine Fahlund, CFP®, a senior financial planner with T. Rowe Price, explains what "successful" retirements have in common.
3David Giroux, portfolio manager
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