Here’s an eye-opening statistic: 73% of Americans who are collecting Social Security (SS) today are receiving less than their full benefit. That’s right — they may not be getting their just deserts.

That’s because we all have options when it comes to collecting Social Security benefits. And the decisions can be complicated, particularly when you consider the many facets of the program. There are spousal benefits, survivor benefits, disability — and that’s not all. I’ll get into these in future posts. Today, we’ll focus on individual benefits and the critical decision of when to start collecting them. Essentially, you have three choices, and the one you choose will affect the size of your monthly paycheck.

  1. Take benefits early. You can begin collecting Social Security benefits as early as age 62. In doing so, however, you sign up for a permanently reduced benefit. (Your payment is not adjusted when you reach your SS-recognized full retirement age.)
  2. Collect at full retirement age (FRA). Your individual FRA will be between 65 and 67, depending on your date of birth. This is the age at which you are entitled to your full benefit, known as your primary insurance amount, or PIA. Your PIA is the basis for all Social Security estimates and calculations.
  3. Wait. For every month past your full retirement age, you receive a “raise” from the government. It’s technically known as a delayed retirement credit, and you can earn them until they max out at your 70th birthday.

Early Bird, Smaller Worm

If you opt to begin taking benefits at age 62, you get dinged for each month short of your FRA. For some, it may make sense to collect early: It may be a matter of financial need, or perhaps your own health and/or family history might indicate a certain prudence in taking benefits early.

In making the decision to collect early, however, keep in mind that your benefits will be adjusted downward if you are collecting and still working.

Why? Because Social Security is, after all, a retirement benefit. Thus, the Social Security Administration will withhold part or all of your benefits if they feel you earn “too much” money, as defined here.

Bigger Take for Those Who Wait

For those who can wait until age 70 to begin collecting Social Security benefits, the upside is meaningful: It amounts to a 32% increase in your monthly Social Security check … for life. (At the other end of the spectrum, collecting at the earliest possible time amounts to a 25% permanent decrease in benefits.). The chart below assumes a FRA of 66 and offers an illustration of the possibilities.


Source: Social Security Administration ( Assumes full retirement age of 66 and individual born in 1943 or later.

When Is Right for You?

Determining your “best time” to collect is not necessarily easy. When the only benefit to which you are entitled is your own, the decision-making process is fairly straightforward. Consider your life expectancy and financial needs, talk with your financial professional and go from there.

But — are you married currently? Have you been married before? Do you have children? The answers to these questions and more can have a meaningful impact on your collection strategy.

Sources: BlackRock; Social Security Administration. Please see the Social Security Administration’s website at for more information, restrictions and limitations about Social Security benefits.

Rob Kron, Managing Director, is the head of Investment and Retirement Education for BlackRock’s U.S. Wealth Advisory group.

This material is provided for educational purposes only and does not constitute investment advice. The information contained herein is based on current tax laws, which may change in the future. BlackRock cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. The information provided in these materials does not constitute any legal, tax or accounting advice. Please consult with a qualified professional for this type of advice.


Investopedia and BlackRock have or may have had an advertising relationship, either directly or indirectly. This post is not paid for or sponsored by BlackRock, and is separate from any advertising partnership that may exist between the companies. The views reflected within are solely those of BlackRock and their Authors.

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