Trying to figure out when to get Social Security can be a headache. The “full” retirement age is currently set at 67, but you can start receiving Social security benefits from the age of 62 or delay receiving benefits until the age of 70. There are arguments for leaving early, staying at full retirement age, or waiting, so you’ll need to think about what’s best for you.

Deciding when you start collecting benefits will affect your monthly Social Security payments, which could impact financial decisions for the rest of your life. And when we consider other factors, such as annual COLA increasetrying to figure out when the best time is for you can be a challenge.

Ultimately, your own financial situation will play an important role when you retire. Reviewing your current assets, like your 401(k) and other investments, can give you a better idea of ​​the ideal time to retire. And of course, if in doubt, talk to a financial advisor. Below, we’ll review some factors you should consider when determining when you should start collecting benefits.

To find out more, don’t miss how to change your social security number if you need to And how to apply for a replacement social security card.

How are Social Security benefits calculated?

To calculate your Social Security benefits when you retire, the Social Security Administration takes the average monthly salary up to 35 years of professional experience. This average is your “primary insurance amount“, is what you can expect to receive when you reach full retirement age. The current full retirement age is 67 if you were born in 1960 or later. People born before 1960 reached full retirement age a few months earlier.

The calculation includes income up to the maximum taxable amount, which was $168,600 for 2024 and $176,100 for 2025.

The Social Security Administration will then choose your years of work with the highest income — accounting for inflation — then take the sum of those earnings and divide it by the total months worked in those years to create an average rounded down to the next lower amount.

Your calculated earnings are indexed so that future benefits are adjusted to the cost of living to help offset inflation. This number is calculated to determine your monthly benefit amount. For 2024, the maximum social security benefit for someone of full retirement age, it’s $3,822.

If you are married or were previously married to someone who paid into Social Security through taxes, in specific situations you may be entitled to a portion of these benefits.

If you are unsure how your monthly benefits will be calculated when you retire, the Social Security Administration offers a very simple and easy-to-use calculator to estimate your profits.

When should you start receiving Social Security benefits?

When you decide to collect Social Security benefits is a personal decision and depends on several factors, including the state of existing finances. The longer you wait to collect benefits, the more you can expect to receive, but you have fewer years to collect them. You can start earlier and get a smaller check, but over several years.

Helping you think about this is Katherine Tierney, senior retirement strategist for client needs research at a financial services company. Edward Jonessuggests asking yourself these questions: When will you to want retire and when can you allow retire?

These two questions will play a major role in your answer. You should, of course, think about the lifestyle you want during retirement and compare it to all the money you have saved, including in your 401(k). Will you have a pension or are you considering taking a part-time job to get extra income? Of course, your own health and life expectancy are factors that cannot be ignored either. And if you have a spouse who will also receive Social Security, you might want to consider that, too.

Wait for a bigger payment? Or retire early and get a smaller check?

If you’re approaching retirement age, this is a question that may weigh on you.

“Social Security can act as insurance against living longer than expected, and it provides some protection against inflation since your benefit is adjusted for cost-of-living increases,” Tierney said. “The longer you or your spouse expect to live, the longer it may make sense to wait to claim your Social Security benefits.”

But just because you decide to wait to claim your benefits doesn’t mean you should delay retirement, she explained. However, you need to make sure you have income from your 401(k) or other investments so you can pay your living expenses if you delay applying for your benefit.

However, if you rely solely on Social Security benefits to pay your retirement expenses, waiting until retirement and claiming your benefits at a later date might be a better choice. You’ll receive more money each month and have more time to save for retirement.

Additionally, if you choose to retire early, your benefits will be reduced for each month before full retirement age. For example, if you were born in 1960 or later and retire at age 62 with a retirement benefit of $1,000 per month, your payment would be reduced to $700 (a 30% reduction).

On the plus side, that’s still $700 that you wouldn’t otherwise receive during that time if you weren’t collecting your Social Security benefits. You could therefore benefit from collecting payments over a longer period.

If you retire early, could you run out of money?

When you apply for Social Security benefits, you receive them for life, unless you manage to lose thembut the funds suddenly I won’t miss.

Instead, you could deplete your 401(k) or other retirement savings. To guard against this, you can take steps to be careful with your withdrawals if you retire early, Tierney says.

She recommends regularly monitoring your spending and 401(k) withdrawal rate so you don’t outlive your own assets. Ignoring an annual increase in your spending or reducing your spending can help you avoid spending your savings and even more. when inflation is high.

To find out more, don’t miss the Social Security payment schedule And how to apply for social security benefits.