Most people know the basics of Social Security, you can start claiming at age 62, reach “full retirement age” (FRA) between 66 and 67 depending on your birth year, or delay benefits until age 70. Waiting longer increases your monthly payment — delaying past your FRA can increase benefits by up to 8% per year.

On paper, delaying sounds great. But in real life, the decision is more complicated and could actually cost money for some retirees.

Social Security at 62

The main problem with “basic math” is it ignores longevity risk. If you don’t live as long as expected, waiting longer could reduce your total lifetime payout. For example, If you wait until age 70 to start collecting Social Security but pass away at 72, you get only two years of payments. Claiming earlier at a reduced rate could have given more money over your lifetime, as reported by Moneywise.

If you die before 70, you might get nothing from a system you’ve paid into for decades. It is hard to know how long someone will live. In the U.S., the average life is about 78 years, but it is different for everyone. Some people live into their 80s or 90s, while others do not reach that age, as per Peterson-KFF Health System Tracker.

Breakeven age analysis

Financial advisors often use a “breakeven age” analysis. This estimates the age at which delaying Social Security gives more total money than claiming earlier. For example, someone eligible for $2,000 per month at full retirement age of 67 would need to live to about 78 years and 8 months to break even compared to claiming at 62, as per the report by Moneywise.

If they wait until age 70, the breakeven age rises to roughly 80 years and 5 months. Even breakeven analysis has limits — it usually doesn’t consider the time value of money or the opportunity cost of using and investing benefits earlier.

The “wait until 70” strategy looks good on paper, but taking Social Security at 62 could be smarter for some people depending on health, life expectancy, and financial needs, according to the report by Moneywise.

FAQs

Q1. Should I take Social Security at 62 or wait until 70?

Taking it at 62 can be smarter if you want money earlier or are unsure about living to 70.

Q2. What is the breakeven age for Social Security?

The breakeven age is when delaying benefits gives more total money than claiming early, usually late 70s or early 80s.