Retired engineer Doug Diederich advocates starting Social
Security as soon as possible.
Some years ago, he and his wife both filed for Social Security
benefits at age 62. That was four years before their full
retirement age and eight years before they could maximize their
Social Security payouts (excluding the use of special
Their early filing reduced their Social Security benefit 25%.
But by using Social Security for living costs, they could retain
The happy result, says Diederich of Larkspur, Colo.: "What
I've earned in the
has more than compensated for our reduction in Social Security.
We've also gotten the comfort from not spending down
But evidently, Angela Deppe wishes that her mother had held
off: By starting Social Security early, at age 62, her mother
will forfeit more than $100,000 in cumulative income.
If she had waited for Social Security until age 70, her mother
"might not have had to continue working as hard as she is today
to make up for insufficient retirement savings," says Deppe,
founder of the online Social Security calculator and resource
Such divergent views highlight the debate -- gaining traction
as hordes of baby boomers retire -- over when to take Social
Security. Pitted against a host of reasons for wanting the money
sooner rather than later are the arguments for waiting: Today,
people are living longer, and many lack sizable savings, some
experts point out.
With Social Security, they get an inflation-adjusted benefit
that lasts throughout retirement. And if they defer taking it
past full retirement age (66 for those born between 1943 and
1954), their entitlement will grow 8% each year they don't
collect, up to age 70.
Better To Wait?
"It generally makes sense for workers to postpone claiming
(Social Security) as long as possible to get the highest monthly
amount, assuming they are in good health for their age," Alicia
Munnell, director of the Center for Retirement Research at Boston
College, wrote in a report, "Social Security's Real Retirement
Age is 70."
A recent Nationwide Financial Retirement Institute consumer
survey found that 38% of retirees surveyed wished they had waited
longer to start taking Social Security.
But for now, claiming benefits early -- even before full
retirement age -- is still widely preferred. According to Social
Security Administration data, in 2012, the average age for
beginning Social Security rose slightly to 64.2 years for men and
64 years for women, from an average 63.6 years for both men and
women in 2005. Less than 2% start taking Social Security at age
Financial planner Brian Vosberg of Glendora, Calif., believes
"there is no absolutely correct time to take Social Security.
Timing can depend on a variety of factors, from one's health to
financial and even taxation considerations."
Nonetheless, Vosberg's analysis of Social Security's payouts
shows big differences between delayed filing for Social Security
and starting it early.
In his example, a hypothetical single, never-married woman now
age 62 would be entitled to a $1,500-a-month Social Security
benefit at her full retirement age of 66.
Should she begin her benefit as early as possible, at age 62,
she would start with a reduced payment of $1,125. But by waiting
until age 70, she'd start collecting a larger monthly $2,469.
At age 90, her accumulated benefit, with assumed 2.8%
cost-of-living adjustments, would reach $793,337 if she'd waited
until age 70 to start it. That total is $217,936 more than she'd
have cumulatively gotten if she'd begun taking Social Security at
age 62, says Vosberg, author of The Complete Retiree's Guide to