Impact of Age on Timing Social Security Payments Disbursement
When it comes to claiming Social Security benefits, age is just one of several factors to consider. Here are some key questions to help personalise a claiming strategy, balancing income needs, health outlook, marital and family circumstances, work plans, and emotional readiness.
Health Status and Expected Life Expectancy
Longer life expectancy may favour delaying benefits to increase monthly payments. 13
Marital Status and History
This affects eligibility for spousal or survivor benefits, which can influence timing and coordination strategies. 123
Continued Work After Claiming Benefits
Earnings before full retirement age can reduce benefits temporarily due to the earnings test and affect taxes. 13
Financial Needs and Resources
Consider other sources of income, tax implications, and retirement cash flow needs. 123
Survivorship Concerns and Minor Children
These details can change who benefits and when. 2
Multiple Income Streams or Dual-Income Family Considerations
Coordination can optimise total household benefits. 2
Family History
A family history of longevity can support delaying benefits. 3
Psychological and Behavioral Factors
Emotional preferences around spending, trust in Social Security, and perceptions of mortality can influence the decision. 5
Widowed, Divorced, or Age Gap with Spouse
These factors influence eligibility and optimal timing for spousal or survivor benefits. 2
Social Security at 62 and Married
If you start Social Security at 62 and are married, your spouse's monthly benefit would drop from $500 to $350.
Restarting Social Security Benefits
It is difficult to stop and restart Social Security once benefits have been claimed.
Medicare Enrollment
If you're planning to retire in 2025 and give up your group health coverage, you'll need to look into Medicare enrollment and have an eight-month special enrollment period. Medicare eligibility begins at age 65, and you have a six-month window to enroll starting three months before your 65th birthday. 14
Age and Full Retirement Age
Those born on the first of the month should use the previous month's numbers in SSA's calculations. Those born on Jan. 1 should use the previous year's numbers. The full retirement age (FRA) varies depending on the birth year, with those born in 1960 or later having an FRA of 67. 1
Starting Social Security Early or Late
If you start taking Social Security at age 62, your monthly payments will be reduced. If you start collecting benefits at 67, your benefit will be 102.7% or 2.7% more than your primary insurance amount. If you wait until 70 or later, your monthly benefit will be 126.7% or 26.7% higher than if you started at your FRA of 66 and 8 months. 1
Penalties for Late Medicare Enrollment
If you don't sign up for Medicare on time, you risk a lifelong surcharge on your Part B premiums. 4
Social Security Benefits for Those Born in 1958
Those born in 1958 have a full retirement age (FRA) of 66 and 8 months for Social Security purposes, starting in 2025. The benefit amount for those who start collecting Social Security at their FRA of 66 and 8 months will be the full primary insurance amount. 1
Delaying Social Security Benefits
For each month you delay after your FRA, you'll receive an additional 2/3 of 1% increase in your benefit amount. Delaying Social Security until age 70 will increase your monthly payments and further increase your lifetime benefit by up to 8%. 1
Starting Social Security Early May Be Justified
Taking Social Security early may be justified in cases of poor health or no longer wanting to work. For example, if you were born after 1960 and start at 62, a $1,000 monthly benefit would be reduced to $700. 1
The Social Security Administration provides a table showing the percentage decrease in benefits for starting before the FRA. You have to be at least 62 years old for an entire month to be eligible for Social Security benefits. 1
[1] SSA (2021). Retirement Planner. https://www.ssa.gov/planners/retire/index.html
[2] SSA (2021). Retirement Publications. https://www.ssa.gov/pubs/
[3] SSA (2021). Retirement Calculator. https://www.ssa.gov/benefits/retirement/calculator.html
[4] Medicare (2021). Sign Up, Change Plans. https://www.medicare.gov/sign-up-change-plans/
[5] Carroll, J. S., & Hersh, B. (2014). The impact of health literacy on the decision to claim Social Security benefits. Health Education & Behavior, 41(3), 329-339. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3915952/
1 Personal-finance considerations such as pension, savings, and investments may influence the decision to start Social Security early or delay benefits.
2 Managing personal-finance concerns, including other income streams, tax implications, and retirement cash flow needs, can help in optimising the timing for Social Security claiming.
