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Deciding when to sign up for Social Security benefits is a big deal. And just for the record, it’s not the same as deciding when to retire. The two do not have to be simultaneous.

Less Now, More Later

You can sign up for Social Security benefits at age 62. But you’ll get only between 70% and 75% of your full benefit, depending on when you were born. To get your full benefit, you have to wait until your full retirement age (“FRA” — from age 66 to 67 for those born after 1942). If you wait longer, your benefit will increase approximately 8% a year until age 70.

The Breakeven Point

You might think waiting is the best choice, especially if you don’t need the money at age 62 or you’re still working. But it’s not that simple. You should calculate the point at which higher benefit payments will start giving you an overall dollar advantage. If you live beyond your breakeven point, then the total amount of Social Security you receive will be more than if you’d chosen lower payments and an earlier starting date.

However, health and finances are also important factors. Someone in poor health might want to take benefits earlier rather than later.

Strategies for Couples

Married individuals generally can choose between their own Social Security worker’s benefit and a spousal benefit equal to 50% of their spouse’s benefit, whichever is higher. Here are two claiming strategies that could pay off.

Claim now, claim more later. Suppose you’re still working when you reach FRA, and your spouse is already collecting Social Security. You can claim a spousal benefit at your FRA, then file for your worker’s benefit (which continues growing) when you retire or reach age 70.

Claim and suspend. Suppose your spouse has just reached FRA and wants to start collecting a spousal benefit based on your earnings record. There’s a problem: Although you’ve reached your FRA, you haven’t filed for Social Security because you want to earn delayed retirement credits. You can claim your benefit so your spouse can collect a spousal benefit. After a few months, you can suspend your benefit, which allows you to continue building up delayed retirement credits

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