Managing it

When and how you start collecting Social Security will determine whether you take full advantage of the total benefits available to you.

When should you start taking your Social Security benefits? You might feel tempted to begin as soon as you qualify at age 62, but this may not be the best choice for you. If you are single, your decision on when to take benefits may depend, in part, on the amount of retirement savings at your disposal. Ideally, you would maximize your Social Security benefit by working until age 70 before applying for any payments. If you are married, however, you have more options to consider, and the decisions you and your spouse make will affect your combined income in retirement.

As with single individuals, you and your spouse will benefit most from Social Security if you continue working until age 70. Doing so will significantly increase the Social Security benefits available to you throughout retirement. But that’s not always the most appropriate strategy. "Many couples prefer retiring before age 70," says Christine Fahlund, CFP®, a senior financial planner with T. Rowe Price. "In that case, we suggest they consider the option of choosing a compromise known as a ’wait and take’ strategy."


Using the T. Rowe Price Social Security Benefits Evaluator tool on our website, the following hypothetical scenarios explore the pros and cons of three different goals for Social Security benefits. Together, these scenarios show how different decisions produce different lifetime incomes from Social Security alone.

A Look At The Numbers
Consider the scenarios for Paul and Jane, both age 60. Paul currently earns $90,000 per year and Jane earns $50,000. For the purposes of the following examples, we assume Paul passes away at age 83 while his wife survives until age 95. Jane will receive the larger of the couple’s two benefit payments as a survivor’s benefit. The goals they set and the decisions they each make about when to begin receiving benefits will have a direct impact on their combined cumulative lifetime income from Social Security.


Despite your best planning, you may need to begin taking your Social Security benefits sooner than expected. "Many individuals may need the income Social Security provides," says Fahlund. If so, both you and your spouse could choose to receive benefits as early as age 62, when you become eligible. But that decision would mean you would both receive the smallest benefit available—only slightly more than half of the maximum amount for which you could be eligible.

The Benefits Evaluator shows the outcome if Paul and Jane rely on the "early" strategy. (See table above.) Their combined lifetime benefits approach $1 million—a clear indication that Social Security represents an important part of Paul and Jane’s retirement income plan. As a result, they should make the most of the benefits they are eligible to receive.

Consider these basic facts as you work through your own scenario.

  • You can start collecting benefits as early as age 62 or as late as age 70.
  • Each year you wait to take benefits will increase the amount you receive annually by approximately 7% to 8% plus inflation adjustments. This guaranteed "annual return" is based on Social Security Administration formulas rather than market conditions, so it is more predictable than annual returns on your investment portfolio.
  • Social Security benefits have tax advantages. Anywhere from 15% to 100% of Social Security benefits is federal income tax-free and, in addition, in many parts of the country, Social Security benefits are 100% state tax-free.
  • When a married worker files for Social Security retirement benefits, that individual’s spouse may be eligible for a benefit based on the worker’s earningscalled a "spousal benefit."
  • A surviving spouse receives the larger of the two spouses’ benefits and is not eligible to continue receiving both at the same time.
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