When to Take Social Security for Singles

5 Factors For Singles To Consider When Deciding When to Begin Social Security

mature woman
Delaying Social Security for singles can provide a valuable longevity hedge. ONOKY/Eric Audras/Getty Images

Social Security benefits represent a large portion of most upcoming retiree’s assets. Making the decision as to when to take your Social Security in order to maximize these benefits is more important than ever.

You can decide when to take Social Security and you can coordinate this decision around other sources of retirement income, potentially earning thousands of extra dollars in after tax income when you do it right.

Unfortunately, most people make this decision without any advice.

Among individuals who stopped working before 62, more than 75% claim within two months of reaching 62. In many cases it would be far more advantageous for these individuals to use other savings to support their lifestyle, even including potential IRA withdrawals, and thus delay the start date of their Social Security benefits.

Being knowledgeable about claiming rules can help you make the right decision, as many of the Social Security decisions you make are irrevocable. If you are single, the decision is less complex than if you are married.

For singles, here are the 5 relevant factors to consider in deciding when to begin your Social Security benefits.

1. The Impact Of Claiming At Age 62 vs. Waiting Until Age 70

Social Security benefits may be claimed at any time between 62 and 70. You receive a “full” retirement benefit, called the Primary Insurance Amount (PIA) at your full retirement age (FRA), which is 66 for individuals born 1943-54.

You receive a reduction in benefits if you begin before 66 and a monthly increase in benefits if you begin after 66, with the maximum benefit payable achieved if you wait until age 70 to begin benefits.

At 70, you monthly benefit is 76% greater than what it will be if you start benefits at 62. Below is a table showing the monthly benefit amount received starting at ages 62 – 70 with a PIA of $1,000.

Claiming Age: Benefit Amount

  • 62: $750
  • 63: $800
  • 64: $867
  • 65: $933
  • 66: $1000
  • 67: $1,080
  • 68: $1,160
  • 69: $1,240
  • 70: $1,320

Learn more: Should You Take Social Security at 62?

2. The Impact Of Expected Lifetime On A Single Individual Who Delays Benefits

A single individual who expects to live longer than average can benefit from delaying, while those who expect to live shorter than average can benefit from claiming early. In general, women benefit more from delaying benefits, due to their longer life expectancies.

Studies show the cumulative lifetime benefits will be approximately the same for an individual who lives to age 80, regardless whether they begin benefits at 62, 63, 64, or any age through 70. For this reason age 80 - 82 is often called the "breakeven age", meaning if you live longer than that, it is to your benefit to take Social Security later rather than earlier.

3. The Flaws in Breakeven Age Analysis

While considering break-even age may be an important part of a thorough analysis, using it as the only factor in determining when to begin Social Security is flawed for several reasons.

  • Social Security serves as a valuable hedge against outliving your assets. Research shows that delaying benefits until 70 can extend your portfolio’s longevity by six to ten years. Although you may think you will only live to 82, what if you live to a healthy and productive 92? Delaying Social Security protects you against outliving your money.
  • Considering only breakeven age neglects the impact of taxes. If Social Security is your only source of income you will pay no taxes on this benefit. If you have other sources of income, you may pay tax on up to 85% of your benefits. Between the ages of 62 and 70, you can choose to withdraw savings, and delay the start of your Social Security benefits. In many cases, when viewed on an after-tax basis, this strategy can significantly increase your available monthly retirement income or extend the longevity of your portfolio. You must run detailed tax projections to determine the type of withdrawal strategy that will deliver the most after-tax income for you.

Learn more: How Taxes on Social Security Benefits Are Calculated.

4. Oh Yes, The Earnings Test

One additional factor that is overlooked by simply looking at breakeven age is the earnings test.

Individuals who are working for pay and claim benefits prior to their FRA will face a reduction in their monthly benefits if their earnings from work exceed the earning limit. That reduction is temporary as once the affected beneficiary reaches his/her FRA, monthly benefits are adjusted upward to offset the earlier reduction, however because of the way the benefit recalculation works it make take 13-14 years to recover the reduced benefit amounts. If you plan on continuing to work, it is almost always to your advantage to wait to claim benefits until you reach your FRA.

5. Previous Marriage Over 10 Years in Length

One more factor for singles to consider. If you have a previous marriage that was over ten years in length you may be eligible for benefits on an ex-spouses record. In this case, you need to think about your Social Security claiming decision more like a married couple would. You might be able to use a spousal benefit for a few years, then switch to your own, or vice-versa. Such strategies will boost your lifetime income.

Learn more: 10 Social Security Facts About Benefits For An Ex-Spouse.

Additional research - article written by Brian Duvall, edited by Dana Anspach. Content relies on research that can be found at Social Security research.

Next: Married couples must also calculate the impact of spousal and survivor benefits into their claiming decision. The right claiming decision for a single may not be the right claiming decision for someone with similar financial circumstances who is married. See When to Take Social Security for Married Couples for the relevant factors for marrieds to consider.