September 2007
The benefits of waiting
Jane, our hypothetical worker, was born in October 1946. In 2008, when she turns 62, she can start drawing her Social Security
benefits at a reduced rate, or she can wait and collect higher amounts. We ran the numbers to see the total benefits Jane
would get if she retired at 62, 66, and 70.
Option 1: Jane starts collecting at 62. If she lives past 83, which is her median life expectancy based on Social Security Administration estimates, the decision to start benefits early would cost her tens of thousands of dollars over waiting until age 66 or 70.
Option 2: Jane starts collecting at 66. At nearly age 77, she'll break even with the amount that she would have collected by retiring at 62.
Option 3: Jane starts collecting at 70. She'll break even with her early-retirement benefits at 79½ and her full retirement-age benefits at 81 years, 7 months.
| If Jane ... | Retires at 62 ($1,610/mo.) | Retires at 66 ($2,190/mo.) | Retires at 70 ($2,945/mo.) |
|---|---|---|---|
| By age | Total benefits collected* | ||
| 66 | $78,890 | $2,190 | $ – |
| 70 | 156,170 | 107,310 | 2,945 |
| 75 | 252,770 | 238,710 | 179,645 |
| 80 | 349,370 | 370,110 | 356,345 |
| 85 | 501,510 | 238,710 | 533,045 |
| 90 | 542,570 | 632,910 | 709,745 |
Option 1: Jane starts collecting at 62. If she lives past 83, which is her median life expectancy based on Social Security Administration estimates, the decision to start benefits early would cost her tens of thousands of dollars over waiting until age 66 or 70.
Option 2: Jane starts collecting at 66. At nearly age 77, she'll break even with the amount that she would have collected by retiring at 62.
Option 3: Jane starts collecting at 70. She'll break even with her early-retirement benefits at 79½ and her full retirement-age benefits at 81 years, 7 months.
