Don't leave your retirement money on the table with the wrong choice

A Tool to Determine the Best Time To Take Social Security Benefits

by Gary Foreman

My wife and I both turned 62 last year. We're still working but thinking of retirement. Part of our decision will depend on when we can begin taking Social Security. I've been trying to research the different options, but it's really confusing. And I understand that a recent change in the law makes it even more complicated. Can you help us decide when we should begin to collect Social Security benefits?

Social Security Benefits

William, you're absolutely right. When to begin taking your Social Security benefits could be the most important retirement decision you make. A married couple with moderately high benefits could leave upwards of $150,000 on the table with a bad choice!

And, you're also right that it's complicated. If you go to the official Social Security page here's what you'll find:

You can start your Social Security retirement benefits as early as age 62, but the benefit amount you receive will be less than your full retirement benefit amount. If you start your benefits early, they will be reduced based on the number of months you receive benefits before you reach your full retirement age. If your:

  • full retirement age is 66, the reduction of your benefits at age 62 is 25 percent; at age 63, it is about 20 percent; at age 64, it is about 13.3 percent; and at age 65, it is about 6.7 percent.

  • full retirement age is older than 66 (that is, you were born after 1954), you can still start your retirement benefits at 62 but the reduction in your benefit amount will be greater, up to a maximum of 30 percent at age 62 for people born in 1960 and later.

If you work after you start receiving benefits, we may withhold some of your benefits if you have excess earnings. However,

  • we have a special rule that applies to earnings for one year. The special rule means we cannot withhold benefits for any whole month we consider you retired, regardless of your yearly earnings.

  • after you reach full retirement age, we will recalculate your benefit amount to give you credit for any months in which you did not receive some benefit because of your earnings.

Caution: If you apply for benefits more than 6 months after you reach full retirement age, we can only pay the benefits for the previous 6 months.


That's enough to make your head spin! As a general rule, you can say that waiting until you reach full benefits age will maximize your monthly check.

According to the Social Security Administration the average monthly benefit in 2015 was $1,335. Source:

But waiting might not always be the best answer. Especially for married couples or people who are divorced. Then the earnings history of both people and their ages makes a difference as to when it's best to begin collecting Social Security.

Changes in the law also complicates matters. Strategies like "file-and-suspend" and the "restricted-application strategy" are being outlawed during 2016 for people of a specific age.

You'd think that you could call Social Security and get advice, but their personnel aren't trained and in fact are instructed not to give you advice.

So much as I'd like to give you a specific answer, a lot depends on your unique situation and a 'one size fits all' answer could cost you thousands of dollars. So you'll have to forgive me for passing the buck to professionals. I'd advise you to get professional advice (either from a CPA or Certified Financial Planner® trained in the topic) or use online software to help you find the best time to begin collecting SS.

If you don't have an adviser with expertise in Social Security benefits I'd recommend using the online service of Social Security Choices. We've compared various programs and found their's to be the best. We've also negotiated a special rate special rate of $29.95 (a 25% discount) for Dollar Stretcher readers.

To get a customized report you'll be asked to provide a little non-confidential information:
- an email address to deliver your report
- years of birth for both you and your spouse or ex-spouse (if appropriate)
- an estimate of Social Security retirement benefits for you and your spouse or ex-spouse (if appropriate). You can get this information online from Social Security in a matter of minutes

Next it's time to order your report!

They have specific paths for:

You'll be taken through a questionnaire. And, yes, it does take a few minutes. But that's time well spent on a decision that could make you thousands of dollars. Don't forget you get a discount as a Dollar Stretcher reader. At the end of the ordering process you will be asked for a coupon code. Type "retirement" in the box for 'Coupon Code' to receive your 25% discount.

Share your thoughts with the editor.

Stay Connected with TDS

You've learned how to work smarter, not harder.

After 50 Finances is a weekly newsletter dedicated to people just like you.

Retirement Checklist

And get a free copy of the After 50 Finances Pre-Retirement Checklist. Everything you need to do to be ready for retirement!

Your Email:

View the TDS Privacy Policy.