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62 versus 70 explained

As of February 2023, the average Social Security retirement benefit was $1,782 per month, or $21,384 per year. But the numbers only tell a small part of the story, since how much you can collect grows the longer you wait.

The earliest you can file for Social Security is 62 and you’ve reached “full retirement” — when you can collect 100% of your eligible benefit — between 66 (those born 1943-54) and 67 (those born after 1960). But let’s say you can wait until 2030, when you’ll turn 70. Besides planting a few more candles on that chocolate banana crème birthday cake, buy a round of root beers for everyone: Your checks are going to clock in at 124% your full retirement benefit.

Yet this simple math comes with pros and cons (which become more complex when you factor in a decision to return to work, for example). Take these variables into account before making that first deposit into your bank account.

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It’s a potential stress buster

Financial stress for those on the baby boom’s tail end is in no way theoretical. The highest U.S. inflation in four decades has bitten into savings; the souring of the stock market since late 2022 has whacked many retirement accounts by double-digit amounts. If you’re 62, you can’t exactly wait around for that IRA or 401(k) to rejuvenate itself. Time is tight. Literally.

And so is the dough. Between 2000 and 2022, the number of people aged 60 to 64 who held jobs jumped 9.32%, according to the Minneapolis Fed. While taking Social Security at the earliest possible age isn’t going to be nearly as lucrative, there’s much to be said for using it as a safety valve to relieve financial stress now — and head off possible health complications from it later.

U.S. life expectancy is plummeting

Though it saw a precipitous life expectancy drop during COVID-19, the U.S. remains an outlier among major industrialized nations because it hasn’t since rebounded. The current figure of 76.1 years is the lowest since 1996. Compare that to the U.K., Belgium, France and the Netherlands, which boast expectancies of 80 or more — and Japan, where it’s 84.5 years.

So here’s the harsh projection by way of current averages: Wait until age 70 to collect your Social Security and you’ll have all of six years to use it and who knows how much of that time to enjoy it. Here’s hoping, then, that you’re far above average.

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More is more, especially if you choose to keep working

Assuming you keep working past 62, Social Security comes with diminishing returns the more you make annually. If you’re under full retirement age, the government deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2023, that limit is $21,240.

Lucky you if you choose to work not because you have to but want to. It then makes sense to treat Social Security as a de facto bank account that grows in size while you take home checks from work. And if you’re in the position to let your retirement accounts grow too, so much the better.

If you’re married, have it both ways

Married couples can take advantage of what financial advisers call a “split strategy,” where you coordinate your spouse’s benefit collection with your own. A smart way to do this is to have the lower earner collect first while the higher earner waits. That way, the higher earner's benefit growth will be worth more than the lower earner's increases.

Think about it: You can have your chocolate banana crème birthday cake and eat it, too.

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Lou Carlozo Freelance writer

Lou Carlozo is a freelance contributor to Moneywise.

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