The minute you claim your Social Security retirement benefits, you authorize the Social Security Administration (SSA) to lock in the basis for the checks you will receive for the rest of your life. For many, it's a decision that's made far too lightly:

• I'm in my 60s and can take my foot off the accelerator at work if I claim Social Security as soon as I'm eligible.
• Everyone in my family – my parents and grandparents – started getting checks when they turned 62.
• I hear Social Security may not be around forever, so I should start taking it right away while it's still available.

Not thinking through the Social Security decision carefully – and not making the decision as part of your broader retirement plan – is to diminish its importance in determining how well and how stress-free you might spend your later years.

Yours is not your mother's or father's retirement. First of all, thanks to science and technology, you're far more  energetic and connected than they were at your age. You're healthier. Not only are people staying in the workforce much longer, but many are starting new careers after retiring from the first. Second, people live far longer, so their retirement investments and savings must carry them for many more years.

When to take Social Security and Why

You can file for Social Security benefits at 62, even if you still collect a paycheck. However, every year you delay filing adds to the base figure on which your life-long benefits are calculated. That is true from age 62 until your Full Retirement Age (FRA) at 66 or 67, and for the years between your FRA and age 70, the last year you'll benefit from delaying.

When to start receiving Social Security is a complex decision, and there is no one-size-fits-all best time. Here are the top 12 questions to explore as you plan your unique timing strategy:

1. How long do you expect to live?

Here are some eye-opening details. The average life expectancy of someone turning 65 today is 87 for women and 84 for men. However, according to the SSA, a woman has a 10% probability of living beyond 98, and a man, 96. 

Does longevity run in your family? Based on your health, lifestyle and family history, delaying your Social Security claim until age 70 will increase your lifetime benefits if you anticipate living beyond the average life expectancy. The longer you delay, the larger your monthly checks. However, it's only an advantage if you expect to live long enough to enjoy those payments. (Remember, you'll have given up payments during the years you delayed, even if they'd be smaller.) However, if you have serious health concerns, you'll maximize the time you receive benefits by filing earlier.

2. What are your current and projected living expenses?

Evaluate your monthly expenses to decide if you have enough savings or other income sources to cover them if you delay claiming your Social Security benefits. Waiting could lead to higher lifetime benefits if you are not financially dependent on Social Security to cover your lifestyle.

3. Will you have other income sources when you retire?

If you have enough assets, such as IRAs, investment income or pensions, you may wait until age 70 to file for Social Security. Waiting will result in the largest possible monthly checks, which you'll appreciate as the years go by. On the other hand, if you need the funds from Social Security to cover your living expenses early in retirement, it could make sense to claim earlier. The best approach is to see how your income needs align with your broader retirement strategy.

4. Will your spouse also rely on your Social Security benefits?

If you are married, consider how your claiming age will affect your combined overall benefits. For example, if you are the higher earner in a couple, delaying your benefits can lead to larger survivor benefits for your spouse. If you both have earnings records and are both collecting Social Security, one of the checks will end upon your death, but your spouse can receive the equivalent of your Social Security if it is higher than their own. You can provide more financial security for your spouse by maximizing your benefit through waiting, especially if they are likely to outlive you.

5. How will claiming early affect your lifetime Social Security income?

Your Full Retirement Age (FRA) is when you are eligible for full benefits based on the Social Security tax paid into the system throughout your lifetime. It falls between age 66 and 67, based on your birth year. Claiming before your FRA permanently reduces your base monthly benefit, but delaying past FRA increases it by about 8% each year until you reach age 70. You will want to understand precisely how this works.

6. What is your break-even point?

Calculating your break-even point is one way to help make a more informed decision. For example, it tells you how long you must live to benefit from waiting to claim Social Security at 70, compared with claiming earlier. It is the point when the total of the earlier reduced benefit payments equals the total of benefits you would have received if you had waited to take your benefits at FRA or later. While it's just one factor, it can influence your decision.

7. Do you plan to work in retirement?

If you claim Social Security before you reach your FRA and are still earning income, the SSA's "earnings test" could reduce your benefits by $1 for every $2 you earn over a set annual limit. (In 2024, that limit is $22,320, but it changes yearly.) You don't lose what they reduce; instead, once you reach your FRA, SSA recalculates your benefits to account for what they withheld. If you intend to work, you may choose to hold off claiming to avoid these reductions, although you do get them eventually.

8. How will taxes impact your Social Security income?

Many people don't realize their Social Security benefits can be taxable. SSA uses your "combined income" to calculate any taxes due on benefits. It comprises the sum of your adjusted gross income, nontaxable interest and half of your Social Security benefits. SSA applies a sliding scale, but if your income in 2024 is over $34,000 (if single) or $44,000 (if married filing jointly), up to 85% of your benefits could be taxable. Consider how timing your benefits might affect your tax burden and if you could reduce the overall tax bill by delaying until your other income is lower.

9. What are your healthcare and Medicare needs?

Social Security (available at age 62) and Medicare (available at age 65) are independent decisions. However, your health care needs and costs should figure into when you claim your Social Security benefits. Invest the time to research how Medicare works and the type of plans you will likely choose. You'll need to know that to estimate what premiums and out-of-pocket expenses you'll likely face based on how your health evolves. Delaying your claim for Social Security benefits might make more funds available later when medical expenses could rise.

10. How vital are certainty and financial peace of mind to you?

Some people prefer the predictable income that comes from receiving a regular check earlier, even if it is smaller. If peace of mind and financial certainty rank high for you, you can reduce stress by claiming Social Security early. This is especially important if you are concerned about market volatility affecting your other assets. Alternatively, if you are comfortable drawing down other savings and investment accounts first, delaying your Social Security claiming date might offer a better long-term strategy for you.

11. How does inflation impact your timing decision?

Inflation will affect your purchasing power over the years. Each year, the SSA adjusts benefits for inflation through the Cost of Living Adjustments, or COLAs. Social Security offers these built-in increases, while other retirement income may not be inflation-protected. Although the increases don't typically keep up with inflation, they do provide a partial hedge against inflation in later years. Also, waiting until age 70 increases your base benefit, which can boost your inflation-adjusted payments significantly over time.

12. What role does legacy planning play in your decision?

You may plan to leave a financial legacy for your heirs. If so, delaying Social Security will allow you to preserve other assets by living off your increased benefits in your later years. If not, and if you plan to spend your assets and leave less to beneficiaries, it might make more sense to claim earlier. This choice is closely linked to your overall estate planning and how you intend to provide for loved ones.

Claiming too early

If you file for Social Security too early and later regret that decision, a couple of options exist to reverse or adjust that choice. However, these options come with certain conditions.

Withdrawing your application within 12 months of claiming. You can withdraw your application and undo your claim if you've received benefits for under 12 months. Here's how it works:

• You repay the benefits: everything Social Security paid you and any family members based on your earnings record.
• You reapply later (as if you never filed) when your monthly payments are higher.
• You have one chance to withdraw your application, so you must consider this decision carefully.

Suspending your benefits after reaching FRA. Once you reach your FRA, you can suspend your benefits to stop receiving payments and allow your benefits to grow until you restart. Here are the details:

• Unlike an application withdrawal, you don't need to repay anything; you just stop future payments.
• You can resume anytime, but benefits will restart automatically at age 70 if you haven't restarted already.
• You earn delayed retirement credits for each month you suspend your benefits, at about 2/3 of 1% monthly or 8% per year.

Key considerations. If you have already paid taxes on benefits received, paying benefits back to SSA after withdrawing your application can complicate your tax situation. Consult with a tax advisor before making the decision. Also, suspending or withdrawing your benefits may affect your dependents or spouses receiving benefits based on your record.

By answering these questions, you can make a more informed decision about when to claim Social Security to fit your unique circumstances and long-term goals. However, Social Security is just one piece of your overall retirement plan. Ideally, you will review how it interacts with other financial strategies to ensure long-term financial security.

That's what WH Cornerstone does best: develop custom financial and retirement plans. Many of your answers to questions will involve conjecture, such as how long you'll live. We realize you can't know when life will throw you a curve ball, so we offer what we call Curve Ball Life Planning™.

We understand the value of initiating such planning sooner rather than later – because early planning offers the broadest range of options. Time is also your friend when it comes to all other aspects of retirement planning, allowing your savings and investments the time to grow. For help with any part of the planning process, schedule a call with us. We're here to help.