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Should you claim Social Security early and get a greater number of smaller payments, or should you wait until your full retirement age — or even later — to claim the biggest possible payout?

Timing Social Security can be tricky, but because people are living longer in general, the best strategy is to wait as long as possible in order to receive the biggest benefit possible, financial advisers said.

What about the notion of the break-even date: How long do you have to live for the late-claiming strategy to pay off? Is it better to claim more small payments for longer or to hold out for bigger checks but receive fewer of them before you die?

Read: This country could teach America a lesson about Social Security

“The break-even date is only relevant if you know [your] death date,” said Eric Bond, a wealth adviser with Bond Wealth Management. “In general, delay as much as you can.”

You can begin claiming Social Security benefits at age 62, but you’ll receive less than you will if you wait. Full retirement age is 67 for those born after 1960, and waiting until age 70 would give you 132% of your full retirement-benefit amount. 

“If you wait until age 70, break-even is around 83,” Bond said. 

SSA.gov has calculators that help you determine your Social Security benefits and how much money you’ll receive at different ages. Your benefits are based on the 35 top-earning years of your working life. The Early or Late Retirement calculator shows how waiting longer to claim retirement benefits will substantially increase the dollar amount of your checks.

Read: This is what should happen with Social Security

Your break-even age also depends on your tax situation and on how inflation might affect the purchasing power of your benefits, financial advisers said.

“Tell me a time in history when things have gotten cheaper,” Bond said. 

To determine when you should start claiming Social Security benefits, it helps to look at your own and your family’s health histories. You can also consider claiming your spouse’s benefit amount — or your ex-spouse’s, if you were married for at least 10 years, Bond said.

“Obviously we’re living longer, so we should plan that way. We all need to keep working longer than we thought,” Bond said. “Most people who claim at 62 either didn’t know better or needed the money. Sometimes you have to take it.”

The number of people who claim Social Security benefits at 62 has been dropping in recent years, according to Wade Pfau, a chartered financial analyst and the author of the “Retirement Planning Guidebook.” 

In 2021, 24% of recipients claimed Social Security at 62. That’s down from 2011, when more than half of recipients claimed at the earliest age, according to Pfau.

The argument that a retiree who claims benefits early could invest those funds to top the larger benefit amount they would receive if they claimed later is faulty, Pfau said. Most retirees would not be investing that aggressively in retirement, he noted, and retirees must fund living expenses and spending from those assets.

Of course, there’s no easy answer, which is why the debate rages on.

“It’s really different for everyone,” said Derek Miser, chief executive officer of Miser Wealth Partners.

For married couples, it makes sense to delay the benefits of the spouse with the highest benefits, Miser said.

“Social Security is not a women’s benefit. It’s a male benefit. Women tend to be underpaid and may be out of the workforce for a time,” Miser said. “You need to figure out the impact of deferring the breadwinner’s benefit and the best time to claim that. That will be the survivor’s benefit.”

The debate about timing Social Security is complicated by the fact that the future solvency of the benefit system is at risk. The trust fund that pays out benefits to retirees and survivors will be depleted in 2033, at which point beneficiaries would get only 77% of scheduled benefits. 

Read: Social Security is now projected to be unable to pay full benefits a year earlier than expected

“What Social Security will look like in 2033 is unknown. No one wants to challenge this 80,000-pound elephant sitting in the room,” said Miser.

The risk of Social Security benefits being cut is real. That adds to the complications around planning, Miser said.

For example, if you’re a new retiree at 62 in 2033, you would see a 25% cut due to taking Social Security early, plus a 23% reduction in your payout due to benefit cuts.

“That’s a big cut,” Miser said. “A 45-year-old today will see a different Social Security than their parents.” 

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