(This article originally appeared in the September 2024 issue of Military Officer, a magazine available to all MOAA Premium and Life members. Learn more about the magazine here; learn more about joining MOAA here.)

As you approach retirement, a looming question might be hovering over your
head: When should I claim Social Security retirement benefits?

After paying into the system through Social Security taxes on your earnings for years, you might be ready to claim when you first become eligible. But is that really the right decision? For some people, it might be, while others might be better off waiting even beyond their full retirement age.

Social Security is “a lifelong annuity and lifelong COLA,” said Maggi Keating, CFP®, a financial planner at FBB Capital Partners and the spouse of a retired Marine Corps colonel. Maximizing the monthly benefit you bring in maximizes how you much you will receive over your lifetime and your spouse’s lifetime if you’re married. The larger your monthly benefit, the more it will be boosted by the annual cost-of-living adjustment you will receive. For 2024, the COLA for Social Security was 3.2%.

[UPDATED MONTHLY: MOAA's COLA Watch]

“Most people benefit by waiting if possible,” Keating said.

Here are some key factors to consider as you make the decision of when to claim your hard-earned Social Security benefits, along with some strategies to consider that could maximize your benefits. 

Age

The earliest age to claim Social Security is age 62. But the early bird takes a pay cut.

“If you take Social Security at age 62, you are subject to a permanent reduction in benefits,” said Keating.

[SOCIAL SECURITY BASICS: Know Your ‘Full Retirement Age’]

Claiming at age 62 means a permanent cut of up to 30% of your monthly benefit. Every year you wait until full retirement age, you’ll trim that percentage cut. Wait until your full retirement age, which is age 67 for those born in 1960 or later, and you get 100% of your Social Security benefit.

You could also choose to wait beyond your full retirement age to claim your benefit.

“Waiting until 70 gets you the most per month,” said Jim Blair, a former district manager for an Ohio Social Security office and a partner at Premier Social Security Consulting in Cincinnati. Up until age 70, you will earn 8% in delayed retirement credits each year you wait beyond your full retirement age. That’s an extra 24% added to your monthly benefit for the rest of your life if your full retirement age is 67 and you wait to claim until age 70. If your Social Security monthly benefit is $2,000, that is nearly $500 extra a month and more than $5,700 extra each year by waiting until age 70.

Consider longevity while making the claiming decision. No one has a crystal ball, but you can look to family history and your health history and that of your spouse to gauge life expectancy. The odds are good that either you or your spouse will live into your 90s. Waiting as long as you can to claim can help provide a better source of income in your later years when going back to work is no longer an option.

Of course, any significant health issues or changes to your health might affect your claiming decision — in that case, reevaluate financial plans to make sure they still fit.

[MOAA WEBINAR RECORDING: Understanding Social Security Disability Insurance/Supplemental Security Income (Premium and Life Member Exclusive)]

Marriage Status

A significant factor in the claiming decision is your marriage status. Whether
you are married, were never married, have an ex-spouse, or have a deceased spouse or ex-spouse, your marriage status will determine what benefits you can qualify for and might determine when you want to claim a benefit.

Married couples. If you’re married, the higher-earning spouse should consider waiting to claim until age 70. While delaying until age 70 boosts that spouse’s monthly benefit, it is also the benefit that will last the lifetime of the second spouse to die.

“You get more bang for your buck with delaying the higher benefit,” said Keating.

If the lower-earning spouse outlives the higher-earning spouse, the lower earner can switch to a survivor benefit, which will be worth 100% of what the higher-earning spouse was receiving at their death, including all the delayed retirement credits that were earned. If the higher-earning spouse outlives the lower earner, that spouse will just continue to receive the higher benefit, which can help mitigate the loss of the lower benefit.

“It’s a big surprise to a lot of couples,” said Bryson Roof, CFP®, a financial advisor at Fort Pitt Capital Group, that the lower benefit disappears when the first spouse dies. “Lose one of those benefits, and it can be a huge hit to your monthly income.”

[RELATED: Understanding Social Security Spousal Benefits and Survivor Benefits]

Keep in mind that a spouse who hasn’t earned enough credits to qualify for a Social Security benefit of their own or has a lower benefit than their spouse can claim a spousal benefit worth up to 50% of the higher earner’s benefit, when the higher earner claims their benefit. If the spouse claims the spousal benefit before their own full retirement age, the spousal benefit will be reduced. But if the higher-earner spouse claims early and the spouse taking the spousal benefit is at their own full retirement age, the spousal benefit will be worth 50% of the higher earner’s benefit.

Dual income couples are likely to each take their own benefit, but you can still maximize the benefits, particularly if the couple are close in age. Say a couple are both at their full retirement age. The higher earner, if even by a dollar, could wait until age 70 to claim, while the lower earner claims at full retirement age. Whoever lives the longest will get the higher benefit of the two, while the couple brings in money now in their mid-60s with the lower earner’s benefit.

Blair said that if the age difference of the couple is five years or more, the lower earner should instead claim a reduced benefit at age 62, while the higher earner waits until 70. The lower earner is likely to receive the survivor benefit for a long period of time, so boosting that benefit is more important, and you can bring some money in sooner.

[MOAA PUBLICATION: Preparing for the Loss of a Military Spouse]

Divorced. If you have an ex-spouse, you might qualify to claim a spousal benefit if it’s higher than your own benefit. Your ex doesn’t even have to know that you’re claiming it, and your claim doesn’t affect your ex or a current spouse of theirs.

An unmarried ex-spouse qualifies for the spousal benefit as early as age 62 if the marriage lasted 10 or more years. If the divorce happened more than two years ago, an ex-spouse can claim the spousal benefit regardless of whether their ex-spouse has started benefits or not.

Keep in mind that the spousal benefit is worth up to 50% of the other spouse’s full retirement age benefit.

Claiming the spousal benefit before full retirement age reduces the benefit amount; for instance, claiming at age 62 trims the 50% to 35% if your full retirement age is 67.

Never married. If you have never been married, there is no one dependent on what happens with the benefit except you.

“When single people pass away, the benefit ends. No one will step into their shoes for the survivor benefit,” said Blair.

Most experts say singles likely want to wait until their full retirement age to claim, but waiting beyond that might not make as much sense as for a spouse whose benefit can go to a surviving spouse.

Other assets might also be a factor to consider, particularly for singles.

“Some would take Social Security early to preserve other assets,” said Roof. For instance, instead of covering expenses from savings in a taxable account, some singles might want to use Social Security to cover expenses and preserve those taxable account savings to pass on to an heir.

Surviving spouses. As noted earlier, a surviving spouse is eligible for a survivor benefit worth up to 100% of what their deceased spouse was eligible for at the time of their death, including any delayed retirement credits that were earned while waiting to claim Social Security benefits until age 70.

Surviving spouses who qualify for their own benefit may be able to maximize their total benefits. A key factor to consider is whether their own benefit with delayed retirement credits would surpass the survivor benefit amount.

If you are widowed early, you can claim a survivor benefit as early as age 60, Blair notes. However, claiming the survivor benefit before turning full retirement age results in a permanent cut to the survivor benefit.

But claiming the survivor benefit early could make sense if your own benefit at age 70 would be larger. If that’s the case, the surviving spouse could claim the survivor benefit early and allow their own benefit to grow until age 70, Blair said. At that point, the surviving spouse can switch to their own boosted benefit.

On the flip side, if their own benefit will be less than the survivor benefit, Blair said they could claim their own reduced benefit as early as age 62 and wait to take the survivor benefit at their full retirement age, allowing them to receive 100% of the survivor benefit.

In both cases, the surviving spouse would allow their largest benefit to grow as much as possible, while bringing in some money now.

[UPDATED MONTHLY: MOAA's Surviving Spouse Corner]

Surviving ex-spouses could put the same strategies to use. Ex-spouses who were married for at least 10 years and didn’t remarry before age 60 may qualify for a survivor benefit if their ex-spouse passes away.

Other Income Sources

Consider what other retirement income sources you will have coming in. How much will your military retirement pay be, and will you have a private-sector pension or dividends coming in? Would those be enough to cover your expenses, while you wait to take Social Security?

For instance, Roof said, say a servicemember retired from the military after 25 years and then goes to work in the private sector. When the veteran retires from the private sector, they could take their military pension and let their Social Security grow to age 70.

For those who are still working in their 60s, the earnings test will come into play. If you are still working and claim your Social Security benefit before your full retirement age, you’ll not only take a reduction for claiming early, but you will also be subject to the earnings test. For 2024, $1 in benefits will be withheld for every $2 of earnings exceeding $22,320 if you are younger than full retirement age.

[FROM SSA.GOV: Retirement Earnings Test]

In the year you hit full retirement age, the limits climb: $1 in benefits will be withheld for every $3 of earnings exceeding $59,520 in 2024. In the month you turn full retirement age, the earnings test goes away.

Roof notes that a military pension and VA disability benefits don’t count toward the earnings test. Individual retirement account distributions also don’t count.

Any benefits that are lost to the earnings test are only lost temporarily. After you reach full retirement age, your benefit will be adjusted upward to account for those temporarily lost benefits.