The conventional wisdom says wait as long as possible. Others insist you should collect every dollar you can, as early as you can. Who’s right? The answer depends on some surprisingly straightforward mathematics — and a few complications most people overlook.

by Dave Soulia, for FYIVT.com

For millions of Americans approaching retirement, one question keeps coming up: When should I start collecting Social Security?

Ask five people and you might get five answers. Collect at 62 because tomorrow isn’t guaranteed. Wait until 70 because the monthly checks are bigger. Take it at 67 because that’s the official retirement age.

But Social Security isn’t a guessing game. Its rules establish precisely how much your benefit changes depending on when you claim it.

What those rules cannot establish is how long you’ll live.

And that’s where the decision gets interesting.

First, Understand What You’re Choosing

Under current Social Security rules, someone born in 1960 or later reaches full retirement age at 67. Benefits can begin at 62, but claiming early permanently reduces the monthly amount. Waiting beyond 67 increases it, up to age 70.

Consider someone entitled to $2,000 monthly at full retirement age.

These are illustrative amounts before taxes, Medicare premiums, and future cost-of-living adjustments.

Claiming at 62 means accepting 70% of the full benefit. Waiting until 70 produces 124%.

That’s a 77% difference in monthly income.

But someone collecting at 62 receives eight years of payments before the person waiting until 70 receives anything.

At $1,400 monthly, that’s $134,400.

So when does waiting finally pay off?

The Break-Even Question

Using our example, here’s how much someone would collect in total by different ages, assuming uninterrupted payments and excluding inflation adjustments, taxes, and investment returns.

The break-even age between claiming at 62 and 70 is approximately 80⅓.

Between 62 and 67, it’s approximately 78⅔. Between 67 and 70, approximately 82½.

Live considerably beyond those ages, and waiting generally produces more cumulative benefits. Die earlier, and claiming sooner generally produces more.

That’s arithmetic, not financial advice.

What If You Keep Working?

Here’s a complication that can dramatically change the calculation.

You don’t have to stop working to collect Social Security. However, collecting before full retirement age while earning substantial income can trigger benefit withholding.

In 2026, someone below full retirement age for the entire year can earn $24,480 before Social Security begins withholding $1 in benefits for every $2 earned above that threshold.

Someone earning $44,480, for example, would face $10,000 in benefit withholding.

During the year someone reaches full retirement age, a higher $65,160 threshold applies to earnings before that birthday, with $1 withheld for every $3 above the limit.

After full retirement age, the earnings limit disappears.

Importantly, withheld benefits aren’t necessarily lost forever. Social Security recalculates benefits at full retirement age to account for months affected by withholding.

Wages and net self-employment income count toward the earnings test. Investment income and pensions generally don’t.

What Happens When One Spouse Dies?

This is arguably the most overlooked part of the decision.

Suppose a husband receives $2,500 monthly and his wife receives $1,500. Together, they collect $4,000.

If the husband dies, the wife may qualify for a survivor benefit of approximately $2,500, assuming she’s eligible for the full amount.

She doesn’t collect both checks. The household’s Social Security income falls from $4,000 to $2,500.

If the wife dies first, the husband generally continues receiving his own $2,500.

Actual survivor amounts depend on claiming ages and other eligibility rules.

This creates an important consideration: The higher-earning spouse’s decision to delay benefits can protect the surviving spouse, potentially for decades.

Eligible widows and widowers can generally begin reduced survivor benefits at 60, or earlier under certain disability or child-care circumstances. Some can collect survivor benefits first and switch to their own retirement benefits later.

And children? Social Security isn’t an inheritable retirement account. Adult children generally don’t inherit a deceased parent’s checks, although qualifying minors, students, and adult children with disabilities beginning before age 22 may receive survivor benefits.

What About Investing Early Payments?

Some argue that collecting at 62 and investing the money beats waiting until 70.

Possibly.

But the investment must earn enough, after taxes and expenses, to compensate for the smaller lifetime benefit. Market losses, withdrawal timing, and longevity all matter.

There’s another distinction: Social Security benefits receive cost-of-living adjustments and continue for life. Investment accounts can be depleted.

The often-quoted 8% annual delayed-retirement credit isn’t an 8% investment return. It increases a future monthly benefit in exchange for foregoing payments today.

Taxes Can Change the Answer

Social Security benefits can be subject to federal income tax depending on other income.

For federal taxation, the longstanding combined-income thresholds begin at $25,000 for individuals and $32,000 for married couples filing jointly. Depending on income, up to 85% of benefits may be included in taxable income.

That doesn’t mean an 85% tax rate.

Vermont has its own exemption. For tax year 2025, the state fully exempts taxable Social Security benefits for single filers with adjusted gross income up to $55,000 and joint filers up to $70,000. A partial exemption phases out above that, ending at $65,000 for single filers and $80,000 for joint filers, according to the Vermont Department of Taxes.

Retirement timing, employment income, investment withdrawals, and marital status can all affect the after-tax outcome.

So What’s the Right Age?

There isn’t one universal answer, but there is a rational framework.

Claiming earlier can make sense when immediate income is necessary, life expectancy is limited, or receiving payments sooner outweighs the value of larger future checks.

Delaying can make sense when someone expects a long retirement, can comfortably finance the waiting years, or wants to maximize protection for a surviving spouse.

Continuing to work, particularly before 67, introduces another calculation.

The essential question isn’t simply, “How much will my monthly check be?”

It’s: How much income will I receive over my lifetime, what happens if I live longer than expected, and what happens to my spouse when I’m gone?

Nobody knows their expiration date. But understanding the actual numbers beats taking retirement advice from someone who doesn’t know yours, either.

Before making the decision, visit SSA.gov/myaccount to examine your own benefit estimates at different claiming ages.

The rules provide the numbers. Your circumstances determine what those numbers mean.

Dig deeper in the Finder: how Vermont taxes Social Security

Sources

• Social Security Administration — 2026 benefit and earnings limits
• Social Security Administration — Early and delayed retirement rules
• Social Security Administration — Survivor benefit amounts
• Internal Revenue Service — Federal taxation of Social Security benefits
• Vermont Department of Taxes — Social Security exemption