At What Age Should I Draw from Social Security?

It’s not an easy decision to make when planning retirement in Pennsylvania

Generally, Americans who have worked for 10 or more years have gained eligibility for social security retirement benefits. The monthly benefit amount they receive once retired will be based on their lifetime earnings—the higher the earnings, the higher the benefit.

To calculate their benefit, the Social Security Administration (SSA) looks at the person’s 35 highest earning years. Those earnings are indexed or adjusted to account for changes in average wages over the years. Then a formula is applied to arrive at a benefit amount.

Besides lifetime earnings, the decision of when to begin drawing benefits may have the greatest effect on the amount someone receives each month from social security retirement. Retirees can take benefits as early as age 62, or wait until age 70. The range of monthly benefit amount will vary widely depending on when the benefit is taken.

What is full retirement age?

Retirees will receive their full benefit amount if they retire and apply for social security at their full retirement age. Under the current law, full retirement age for anyone born in 1960 or later is 67 years old. For those born before 1960, the full retirement age occurs sometime during their 66th year.

The SSA indicates that a rule of thumb on when to take the benefit is: If a senior needs the social security benefit money, take it; but if a senior can afford to wait, take it later. The Social Security Administration claims that the total amount of benefits a retiree will receive should work out about the same regardless of whether they take the benefit early or late. Factors to weigh in determining when to take the benefit include:

  • Current health of the retiree
  • Retiree’s family health history
  • Financial condition of the retiree
  • Marriage status of retiree

Early retirement

Retirees can begin receiving social security retirement benefits as early as age 62. However, their benefit will be reduced for taking it early. For someone turning 62 in 2018, the benefit will be reduced 26.7 percent from the full retirement age benefit. If a full retirement benefit amount is $1,000, an early retirement monthly benefit will be reduced to $733. The amount of the reduction decreases each month the senior gets closer to full retirement age.

Delayed retirement

People can also choose to work beyond their full retirement age and delay taking their benefit. This can benefit the person in two ways:

  • An extra year of earnings may increase their monthly benefit amount
  • Receive delayed retirement credits for each year delayed beyond full retirement age

If retirement is delayed until age 70, the retiree can expect an increase of around 30 percent of their full retirement monthly benefit amount—again, using $1,000 as the full retirement benefit amount, the retiree can expect a monthly benefit of around $1,300. Delaying retirement the full eight years beyond early retirement at age 62 amounts to a benefit amount nearly double the early retirement benefit.

Delayed retirement credits end at age 70, so there is likely no incentive to delay beyond then.

What about spouses?

Spouses may earn their own benefit or, if their earnings are much lower, can choose to take a benefit amount equal to 50 percent of the higher earning spouse. This also applies to divorced spouses who were married for at least 10 years. The benefit to the divorced spouse will not affect the amount to the recipient or their spouse. If the higher earning spouse passes away, a surviving spouse will receive 100 percent of the benefit amount of the deceased spouse. That amount depends on whether the deceased spouse has retired early or delayed retirement. This also applies for a divorced surviving spouse; they will also receive the benefit amount the deceased spouse had qualified for if married at least 10 years.

The SSA cautions that social security retirement is only one part of a proper retirement plan, which should also include income from pensions or retirement accounts, savings and potentially part-time employment. To determine the best time to apply for social security retirement, those nearing retirement should contact an experienced Pennsylvania estate planning attorney.

For more information on this area of law, see our overviews of estate planning, wills, trusts, and probate and estate administration.

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