Filing for Social Security in Your First 90 Days: Start Now or Wait?

Within your first 90 days of retirement, one decision sits in front of every newly retired American: file for Social Security now or delay. The Social Security Administration lets you start benefits as early as age 62, the year of your Full Retirement Age (66 or 67 for most current retirees), or as late as age 70. The amount changes dramatically depending on when you file.

The core math is straightforward. If your Full Retirement Age is 67 and your benefit at that age would be $2,000 a month, then filing at 62 cuts it permanently to about $1,400 a month. Waiting until 70 raises it to about $2,480. The difference between filing at 62 and waiting until 70 is roughly 77 percent more per month — for the rest of your life. For a married couple, the decision also affects spousal and survivor benefits.

There are good reasons to file early. If you have health concerns and a family history of shorter lifespans, taking the smaller check now may add up to more total dollars over your life. If you need the income to pay the bills and avoid drawing down savings during a market downturn, filing early is a defensible move. If you are single, your decision affects only you.

There are equally good reasons to delay. Each year you wait between Full Retirement Age and 70 adds about 8 percent to your monthly check, every year, for life. That is a guaranteed return that very few investments match. If you are married and the higher earner, waiting also raises the survivor benefit your spouse will receive after you pass, which can mean tens of thousands of dollars for them over their remaining years.

The in-between strategy that many retirement planners now recommend is delay if you can afford to. Pull from your IRA or 401(k) in the years between retirement and your Social Security start date. This burns down some retirement savings. But it locks in a larger Social Security check every month for the rest of your life and your surviving spouse's life. The break-even point usually lands around age 80 to 83. If you expect to live past that, delaying wins.

(Sources: Social Security Administration — When to Start Receiving Retirement Benefits; SSA Quick Calculator at ssa.gov/oact; Center for Retirement Research at Boston College)