At what age should you start collecting social security – 62 or 70?

The decision to collect Social Security benefits is a complex one and depends on a variety of factors, including your financial situation, your health, and your life expectancy. You can start collecting benefits as early as the age of 62. However, if you can delay taking your benefits until the age of 70, you will get a much larger benefit amount.

In fact, per the social security administration, if you retire around the age of 66 i.e., the full retirement age in 2023, the monthly benefit would be $3,627. However, if you retire early at the age of 62 in 2023, your maximum benefit would only be $2,572. On the other hand, if you can delay your retirement till the age of 70 in 2023, your maximum benefit would be $4,555. That’s 77% more than collecting at age 62.

Here are 10 pros and cons to consider when deciding when to collect Social Security benefits:

Pros of collecting at age 62:

1. You can start receiving benefits sooner and have a longer time period to receive them. If you start collecting at age 62, by the time you hit 70, you would have collected an extra 8 years of benefits estimated at $246,912.
2. It may be a good option if you need the money to cover living expenses. If you do not have any other income, it may be better to start collecting your benefits early.
3. Collecting at 62 can be a good choice if you have a shorter life expectancy. What if you have some health issue and you only expect to live till 70. You might as well start collecting your benefits as soon as possible.
4. You can use the extra money to pay off debt or make other investments. If you have high interest debt that you need to pay off, you can start receiving early to pay off that debt.
5. You may be able to transition to part-time work while collecting benefits. If you want to retire or reduce your hours of work, you can start collecting early.
6. If you are a wise investor and expect to receive larger rates of return, you can retire early and invest your benefits wisely. For example, can you manage to get a 12% return on your investment? If so, your money would have almost doubled in 8 years. If you can continue to draw 12% on your investments, you can easily exceed the extra benefits you would receive after waiting till age 70.

Cons of collecting at age 62:

1. Your monthly benefit will be permanently reduced by as much as 44% compared to what you would receive if you waited until your full retirement age (FRA). S
2. If you continue working while collecting benefits, your benefits may be subject to Social Security’s earnings test.
3. Collecting at 62 may negatively impact your spouse’s future benefits.
4. You may outlive your benefits if you have a longer life expectancy.
5. Taking benefits early may reduce the overall amount of money you receive from Social Security over your lifetime.

Pros of collecting at age 70:

1. Your monthly benefit will be permanently increased by as much as 77% compared to what you would receive if you started collecting at age 62.
2. You may be able to maximize your lifetime benefits by waiting until 70 to collect. If you expect to live long, waiting till 70 may increase the cumulative lifetime benefits.
3. You may receive a larger survivor benefit if you are the higher-earning spouse and your spouse passes away.
4. You may have other sources of retirement income, such as a pension or savings, to help support you until you start collecting benefits.

Cons of collecting at age 70:

1. You will have to wait longer to start receiving benefits.
2. Your benefits may not provide adequate support if you have unexpected expenses or a health crisis.
3. You may be forced to continue working if you need additional income.
4. Collecting at 70 may not be an option if you have a shorter life expectancy.

Ultimately, the decision of when to collect Social Security benefits is a personal one and depends on your individual circumstances. It is a good idea to consult a financial advisor to determine the best strategy for your unique situation.