Social Security Optimization: W

One of the most important retirement decisions you'll make is when to claim Social Security benefits. This choice can affect your income for decades.

Understanding Your Options

You can claim benefits as early as age 62, but your monthly benefit will be reduced. Waiting until full retirement age (66-67 depending on birth year) provides your full benefit, while delaying until age 70 increases your benefit by approximately 8% per year.

Factors to Consider

Your claiming decision should consider your health and life expectancy, other income sources, spousal benefits, work plans, and tax implications. There's no universal "best" age to claim—it depends on your unique circumstances.

Spousal and Survivor Benefits

Married couples should coordinate claiming strategies. The higher earner delaying benefits often makes sense to maximize survivor benefits. Divorced individuals may also be eligible for benefits based on an ex-spouse's record.

The Break-Even Analysis

While break-even calculations can be informative, don't base your decision solely on them. Consider your overall retirement income plan, longevity risk, and the value of guaranteed inflation-adjusted income.