The Backyard Race
The hour after dinner at our house is always an adventure.
Our four young kids seem to have an endless supply of energy, and we encourage them to burn some of it off in the backyard. They know the routine: line up in the grass, sprint to the trampoline on the other side of the yard, and race back.
As you might expect, our 6-year-old is faster than our 5-year-old, who is faster than our 3-year-old.
To make the race fair, each child gets a different starting point. The youngest gets the largest head start, while the oldest doesn’t get any advantage.
If I were betting on my children (I promise I don’t), I would have a hard time determining which child would win. With the varying starting points, they each finish within milliseconds of each other (assuming no one gets distracted by a butterfly or discovers their shoes are on the wrong feet).
Staggered Starts
Social Security works in a similar way.
You can start as early as age 62, or wait until 70 for the maximum monthly benefit, or choose any month in between.
Starting early provides a “head start” with more years of payments but smaller monthly checks. Delaying your benefit means fewer years of payments but larger monthly checks.
With 96 different months to choose from between ages 62 and 70, which claiming age results in the best outcome? And how might our decision affect variables like taxes, retirement cash flow needs, insurance coverage, and asset allocation?
Although I’ve tried my best to simplify in this article, Social Security is a complicated system that requires analyzing your personal situation (especially when coordinating Spousal benefits, reviewing benefits in the case of a divorce, or Survivor benefits).
The decision of when to claim is one of the most consequential financial decisions each of us will make, but the advice is often murky. There is no one-size-fits-all answer.
However, there are several key questions and factors that can help determine the answer to the question “When should I claim Social Security?”
The Lingo
Before we answer this question, a couple of facts and definitions are in order:
- Your Social Security retirement benefits are based on your 35 highest-earning years (indexed for inflation).
- If you were born in 1960 or later, your “Full Retirement Age (FRA)” is age 67. If you were born prior to 1960, your FRA is between 66 and 67 (depending on the year of birth).
- Primary Insurance Amount (PIA): Your retirement benefit at FRA. This is critical to know, as all benefits (early or delayed) are calculated based on this figure. Your Social Security statement (found on https://www.ssa.gov/) will estimate your monthly retirement benefits (example shown below). This individual’s PIA is $3,691 per month (her benefit at age 67, which is her FRA).
Source: SSA.gov August, 6, 2026
- Spousal benefit: Often relevant for homemakers, this is the benefit you may receive based on your spouse’s earnings record (rather than your own). For anyone born 1960 or later, spouses are eligible for 50% of their partner’s PIA at their own age 67, and 32.5% of their partner’s PIA at their own age 62.
- Two notes on the Spousal benefit… 1.) Your spouse must claim on their own earnings record before you claim a Spousal Benefit, and 2.) Spousal benefits do NOT grow past age 67, so it rarely (if ever) makes sense to delay a Spousal benefit past this age.
- Taxation: Depending on your income, up to 85% of your Social Security benefits may be subject to federal income tax. Lower-income households may pay tax on only a portion of their benefits, or none at all.
When Should I Claim Social Security?
For context, about 26% of the 3.25 million people who first claimed benefits in 2024 did so early at 62 (source: Yahoo Finance). Meanwhile, only 10% of Americans plan to wait until age 70 (source: CBS News).
However, what most Americans do isn’t necessarily what’s best for you.
Like any economic consideration, it’s important to understand the tradeoffs.
As the chart below illustrates (assuming your FRA is age 67), you are eligible for 100% of your Primary Insurance Amount (PIA) at age 67.
If you claim at 62, you receive 70% of your PIA (a 30% discount).
If you delay to 70, you receive 124% of your PIA (an 8% increase each year between age 67 and 70).
Source: “2025 Social Security Reference Guide”, MFS
Breakeven
Naturally, this chart leads us to ask the question “When is the breakeven?” In other words, if I claim at 67, how long will I need to live to receive more total benefits than if I claimed at age 62? Or if I claim at 70, how long will I need to live to receive more total benefits than if I claimed at age 67?
There are two primary variables that affect the breakeven calculation: Your life expectancy and the expected rate of return of your investments. The chart below does an excellent job of illustrating the optimal claim age based on these two factors.
This makes intuitive sense. If I could find an investment that consistently generated 15% annual returns (spoiler alert: I can’t), then I would yell from the rooftops for everyone to take Social Security at age 62. Even if an individual didn’t need the cash flow, they could simply reinvest the money and be better off than waiting until 67 or 70.
Most retirees do not have a 100% stock portfolio, so if we look at more reasonable rates of return for a balanced asset allocation (6% for example), then the breakeven age (to claim at age 67 rather than 62) is around 84 years old. In other words, if this individual lives until at least 84, then they are better off claiming at FRA (67) rather than 62.
Of course, nobody knows their exact life expectancy, which is why claiming decisions often involve probabilities rather than certainties.
Life Expectancies
If projecting your life expectancy is one of two critical factors to determine when to claim, then we should understand how long Americans tend to live.
- A 62-year-old male can expect to live until 83, and a 62-year-old female can expect to live until 86 (on average) – source: gov
- However, a male with a household income percentile in the top 1% lives about six years longer than the same male with a median household income.
This is the most overlooked aspect of the Social Security decision – affluent households tend to live significantly longer than average.
Other Factors
Beyond return rates and life expectancy, there are other factors that influence when to take Social Security.
- The Earnings Test: If you are under FRA for the full year and you make more than $24,480, then $1 in benefits will be withheld for every $2 in earnings above the limit. If you reach FRA during 2026 and you make more than $65,160, then $1 in benefits will be withheld for every $3 in earnings above the limit. Bottom line: if you think you will earn more than $24,480 and you are not yet at Full Retirement Age, it’s advisable to wait.
- Taxes: One of my clients experienced a large bonus this year which happened to coincide with his retirement, vaulting his household to the top tax bracket. In this case, it makes sense to wait to claim Social Security until 2027 (as otherwise his Social Security income is subject to the top tax rate).
- Cash Flow: For most who claim early, the reasons are generally one of two things: 1.) a shorter life expectancy, or 2.) a need for cash flow.
- If someone has reason to believe they have a short life expectancy (whether it’s a chronic health issue or family history), claiming early is typically the right choice.
- For others, it’s a cash flow mismatch. They need the cash flow and can’t afford to withdraw more from their portfolio.
Older, Higher-Earning Males
One pitfall I observe is that many people simply look at their own personal benefit to determine when to claim Social Security.
If you are an older, higher-earning male, however, your claiming decision is really not about you.
It’s about your spouse.
Imagine a hypothetical scenario in which Larry has a Primary Insurance Amount (PIA) of $4,200 per month, and his wife Janet (who is 10 years younger and was a homemaker for much of her life) has a PIA of $1,000 per month.
Larry claims at age 62, collecting $2,940 per month ($4,200 x 30% discount).
Ten years later, Janet claims the Spousal benefit at her own age 62. She receives $1,365 per month (Larry’s PIA of $4,200 x 32.5%, which is the spousal reduction at age 62).
Five years later, Larry passes away at age 77 (Janet is 67). As a Survivor benefit, Janet receives the $2,940 per month that Larry was previously receiving.
What if Larry Waited?
Now pretend Larry waited until 70. In doing so, he receives $5,208 per month. Assuming he passes away at age 77, Janet receives the full Survivor Benefit of $5,208 per month.
If Janet lives until age 100, this amounts to 33 years of receiving $5,208 per month as opposed to $2,940 per month.
For a higher-earning, older spouse (especially a male, because we have shorter life expectancies), consider delaying your own Social Security benefit because of the value of the Survivor benefit.
The Head and the Heart
Despite the nuanced Social Security rules, running the breakeven analysis is the easy part. Our team has access to calculators and software that can determine the optimal claiming age within a matter of minutes. But “optimal” can mean different things to different people.
When I took a college road trip from Seattle to LA, we scoped out the map to determine which route was the most efficient. The computer presented a clear answer. But what if bad weather or a road closure altered our route? Does the scenery matter, or is the goal to maximize efficiency?
The decision of when to claim Social Security is both economic and emotional. It requires both the head and the heart. It’s equal parts art and science.
A beautiful spreadsheet might clearly explain the optimal age to claim, but my experience tells me that most Americans have very strong opinions about Social Security. Deciding when to claim often comes down to “this age just feels right”.
With clients, we start by running the analysis. We illustrate the math. We check for any blind spots, and we analyze to see how claiming ages might affect Spousal benefits, Survivor benefits, taxes, withdrawal rates, and more.
For most, the math typically says to wait until age 67 or 70 to claim. For affluent households, however, the difference in outcome between claiming at 62, 67, or 70 may be relatively small.
It often comes down to a statement like the following: “I understand the software recommends delaying my Social Security benefit. But the decision does not break my plan, and I want the freedom to travel and enjoy my grandkids while I’m healthy. The extra cash flow will allow me this freedom.”
For those in the Go-Go years of retirement, claiming early just feels right. As a mentor once explained to me, “Happiness in retirement is positive cash flow.”
The Summary
To summarize, let’s review the reasons for claiming early vs. later.
Reasons for Claiming Social Security Early
- You are bearish on your longevity, or you have a particular health condition that could affect life expectancy
- You are bullish on the returns of your investment portfolio
- You simply want/need cash flow in early retirement, reducing your reliance on portfolio withdrawals
- You are excited about the psychological freedom that comes from higher income in your early retirement years
Reasons for Delaying Social Security
- You have a long life expectancy (a reminder that wealthy Americans tend to live much longer than the average)
- You don’t need the cash flow
- You prefer to have a higher “floor” of guaranteed income in retirement
- The higher-earning spouse (especially when a male) is older than the lower-earning spouse, impacting Survivor benefits
A Customized Plan
Every client scenario is unique. While the example of Larry & Janet was a slam-dunk decision to delay Larry’s benefit, most are not that clear.
I believe too many people claim Social Security earlier than they should.
Some are making this choice because they underestimate life expectancy, overestimate expected returns, or they haven’t considered Survivor benefits.
Some simply can’t wait.
But ultimately, it’s your choice. My goal is that every client is fully informed on the pros and cons of the decision, but that they make the choice that works well for their financial plan and provides them with confidence.
For some, that means delaying to age 70. For others, that means enjoying the Go-Go years and taking it at age 62.
The Choice is Yours
What’s your take? Do you prefer a bird in the hand, or do you prefer to maximize your benefits? If this sparks your curiosity, reach out to your Private Wealth Advisor. If you have thoughts, comments, or questions, please reach out to us at .
Blaine Carver
Private Wealth Advisor
Trevor Cummings
PWA Group Director, Partner
Brett Bonecutter
Private Wealth Advisor
1Assumes the same individual, born in 1962, retires at the end of age 61 and claims at 62 & 1 month, 67 and 70, respectively. Benefits are assumed to increase each year based on the Social Security Administration 2023 OASDI Trustees Report intermediate estimate (annual benefit increase of 2.4% in 2025 and thereafter). Analysis is based on a maximum earner (all earnings profiles yield similar results). Expected rate of return is deterministic, in nominal terms, and net of fees.
