To take, or not to take—that is the question: Whether ‘tis nobler to wait until 70 for the outrageous fortune of a larger Social Security check, or suffer the slings and arrows of a reduced benefit at age 62. Social Security is an important part of retirement income for many Americans and deciding when to begin benefits is a key decision.

If you begin taking benefits at age 62 the amount you receive will be less than your full retirement benefit amount. If your full retirement age (FRA) is 66, the reduction of benefits at age 62 is 25%, at age 63 it’s about 20%, at age 64 it’s 13.3%, and at age 65 the reduction is approximately 6.7%.

If your FRA is older than 66 you may see as much as a 30% reduction of your full retirement benefit amount by starting Social Security at age 62. The decision to take reduced benefits may also affect the amount your spouse receives if their Social Security check is based on your work history rather than theirs.

If you begin Social Security at your full retirement age you will receive 100% of your primary insurance amount. If your spouse receives the spousal benefit at their FRA, they receive 50% of your benefit amount. As an example, if you retire at full retirement age and your Social Security benefit is $1000 and your spouse receives the spousal benefit at their full retirement age, your spouse will receive $500. The combined monthly income is $1500.

If your full retirement age is 66 and you begin taking Social Security at 62, your benefit will be reduced by 25% ($750) and your spouse’s benefit will be reduced by 30% ($350). If you begin taking Social Security at 62 the reduced, combined monthly income is $1100. See the grid for your specific situation.

However, if you wait to draw Social Security until after your full retirement age (FRA) you’ll get more money. Social Security assigns delayed credits to your account which translates to an 8% annual increase from your FRA to the age you begin taking benefits. At age 70 benefits plateau and there is no advantage to wait.

Another consideration about when to draw Social Security is whether you will continue working after you retire. If you retire at 62 and continue working, in 2017, you can earn up to $16,920 with no consequences. Cross that threshold and the government will take back $1 for every $2 you earn above that amount. Once you hit full retirement age you can earn all you want without Social Security dollars being taken away.

There are lots of moving parts to decide when to begin taking Social Security benefits.  It’s a good idea to consult with people who are familiar with the system before making your decision.  You don’t want to leave money on the table.

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