When is the Best Time to Start Taking Social Security Benefits?

One of the questions we all have to face is when to start taking Social Security benefits. This is an issue of importance because the amount you receive in benefits depends on how much you have earned in your lifetime, as well as whether or not you reach “full” or “normal” retirement age as determined by the Social Security Administration before you start taking benefits.

Decreasing Social Security Benefits

You can start taking Social Security benefits at age 62, but you won’t be eligible for full benefits. The Social Security Administration has a chart that indicates when “full” retirement age is reached. For those born between 1943 and 1954, full retirement age is 66. The age increases by two months for every year, until the year 1960 is reached. For those born after 1960, full retirement age is 67.


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If you start taking Social Security benefits before your full retirement age, you will lose benefits. You lose 5/9ths of 1% of your benefits for every month below the full retirement age, up to 36 months. If you are more than 36 months younger than the normal retirement age when you start taking benefits, you will see a further 5/12 of 1% reduction for each month. There is a benefit reduction chart, including how it affect’s your spouse’s benefits, from the SSA as well.

It is also worth noting that you receive extra benefits if you wait until after your full retirement age to begin receiving benefits. Each year that you wait, you get 8% add to your benefit until you reach the age of 70. If you work during this time, your benefits can increase as your lifetime earnings go up.

What If You Don’t Have a Job?

Since the benefits you receive also depend on your lifetime earnings and how much you paid into the system, if you don’t have a job between the age of 62 and your full retirement age you won’t get the same benefits that you would if you had been working. Some who can’t find a job after the age of 62 choose to draw on their retirement savings in order to avoid taking Social Security benefits. This way, they get full benefits at retirement age.

If disability is the reason you don’t have a job, you can apply for Social Security disability benefits. These are the same as your unreduced benefits would be — even if you aren’t full retirement age. Once you reach your full retirement age, your disability benefits will be converted to retirement benefits.

Can You Start Taking Social Security Benefits When You Have a Job?

Interestingly, you can start taking Social Security benefits when you are 62 or older — even if you have a job. However, you will be subject to the reduction in benefits for each month under full retirement you are. Also, there is a cap; once you receive a certain amount in benefits while you are working, you have to start giving back 50 cents of every dollar you receive in benefits. The cap, and the benefits you have to return, still apply after full retirement age. As long as you are working and receiving Social Security, you are subject to the cap.

Bottom Line

When you decide to start taking Social Security benefits depends on your financial situation and your needs. However, it is almost better to wait until you are sure you are done working before you start taking benefits. If you want more information on your benefits, and what you might be entitled to, you can check your annual Social Security statement, or use the estimator provided by the SSA.

About the Author

By , on Aug 11, 2011
Miranda Marquit
Miranda is a professional personal finance journalist. She is a contributor for several personal finance web sites. Her work has been mentioned in and linked to from, USA Today, The Huffington Post, The San Francisco Chronicle, The New York Times, The Wall Street Journal, and other publications. She also has her own personal finance blog: Planting Money Seeds.

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Leave Your Comment (5 Comments)

  1. Pinyo says:

    @Mary – If the jobs are “killing” you guys, then taking an early retirement might be the better option. There’s a popular rule of thumb that said 80% pre-retirement income should be enough — but that’s also depends if your expenses go down if you stop working. I think the biggest expense will be making sure that both you and your husband have some sort of health insurance.

  2. Mary Lucas says:

    My husband and I are 62 and 63, work in jobs that we do not like and that are taking their toll on both of us physically and emotionally. Between social security, even if it is early, and our retirement through our company, we will have about 80% of our pre retirement income. Wouldn’t that be enough? And isn’t our health and emotional well being worth giving up a little money over? What good would it do for us to keep working, and then die just as we hit the social security age?

  3. Kevin says:

    In some situations it might be worth taking the benefits early, even at 62. Obviously if you have no other income, but another one to consider is affect on drawing down retirement assets. You want to defer that as long as you can so that 1) the assets will continue growing and, 2) you hold off withdrawals so that there will be that much more in your later years when you can no longer work.

  4. Andy says:

    My concern about waiting is how many more years it takes to catch up (to receive the same total lifetime benefit), could most people live long enough to break even?

  5. krantcents says:

    I decided to wait to draw Social Security until my wife and I turn 70. Both of us are still working and at our income, the benefits would be taxable and lower if we wait.

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