Deciding when to start claiming Social Security benefits can be one of the most difficult decisions for retirees. Most financial advisors recommend delaying the start of Social Security, if possible, because your monthly payout will increase up until age 70, when there’s no longer a benefit to waiting.
But some people nearing retirement may be wondering if there’s an argument for claiming Social Security earlier and investing the benefits themselves.
Here’s how to think about the trade-offs and choose the Social Security strategy that works best for you.
Social Security: Increased payments for delaying retirement benefits
You can start claiming Social Security at age 62, but people born in 1960 or later will reach full retirement age — when they can receive their full benefit — at age 67. If you start claiming your payout early at age 62, your monthly benefit will be reduced by about 30 percent.
However, if you delay the start of your benefits, the amount will increase by 8 percent each year you wait until you reach age 70. Social Security benefits are also adjusted each year for inflation. Here’s how a monthly benefit of $2,000 at full retirement age might change if you start claiming at different ages.
|
Age you start receiving Social Security |
Monthly benefit |
|---|---|
|
62 |
$1,400 |
|
63 |
$1,500 |
|
64 |
$1,600 |
|
65 |
$1,733 |
|
66 |
$1,867 |
|
67 |
$2,000 |
|
68 |
$2,160 |
|
69 |
$2,320 |
|
70 |
$2,480 |
Source: Social Security Administration
The decision on when to start claiming benefits will depend on your unique circumstances, and you should consider variables such as your other retirement savings, need for cash and estimated life expectancy.
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Why claiming Social Security early to invest is so risky
While delaying receiving Social Security until age 70 is often recommended by financial advisors, some may be wondering if it makes sense to start collecting payments at age 62 and investing the money on their own.
“Absolutely, positively not. The answer is ‘no,’” says Laurence Kotlikoff, an economics professor at Boston University and an expert on Social Security.
Choosing to invest in stocks, which can be quite volatile, ignores the riskiness of stocks and the safety of Social Security, Kotlikoff says.
Stocks have performed above their long-term average in recent years, with S&P 500 index funds returning about 14.9 percent annually over the past five years, as of June 2025. The return over the past decade is about 13 percent.
Retirees in the past decade may have been able to capture additional gains by claiming benefits early and investing the Social Security payments into stocks. But recent strong performance shouldn’t be counted on, and there are plenty of other time periods when market volatility would have led to major losses for retirees.
“There’s other 10-year periods when you would have lost your shirt,” Kotlikoff said.
To be sure, not every retiree can afford to delay Social Security until age 70. If your spending needs can’t be met with other resources, you may be forced to take Social Security at an earlier age. But the 8 percent annual increase for each year you delay beyond full retirement age is essentially a guaranteed return that can’t be found in other investments.
“The short-run sacrifice is far smaller than the long-term gain,” Kotlikoff said.
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Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.