When should you take Social Security?
Of course each situation (yours included) is different and no decision should be based off of one article on when to take Social Security benefits. There are some things you should know that can help you with this question. If you retire between the ages of 62 and 65 and your full benefit age is 65, your full benefit is reduced by five-ninths of 1 percent for each month you receive your benefits before reaching age 65. Therefore, if you retire at age 62, you get 80 percent of your primary insurance amount (PIA) each month, while if you retire at age 63½, you receive 90 percent of your PIA. Something else to understand though is that the difference in monthly benefits from retiring early to retiring later...say at age 70 you could receive 70% or more per month by waiting.
On the other hand, by retiring earlier you may get more dollars back from Social Security during your lifetime than if you retire later--you receive benefits for a longer period of time if you retire at age 62 instead of at age 65. To reach the break-even point and recover the three years of benefits you would have received had you retired at age 62, you must receive benefits for about 15 years beyond retiring at age 65. [Note: If you were born after 1938, your normal retirement age will be raised.]
What happens when you continue working after retirement? If you are under age 65, your benefits are reduced by $1 for every $2 of working income. From ages 65 to 69, you lose $1 of Social Security benefits for every $3 of employment income until you reach age 70, after which you can collect full Social Security retirement benefits regardless of how much you earn.
The best strategy is to coordinate all your existing benefits with potential Social Security benefits. Then you can choose which provides the best long-term financial reward.