Thank you for your question about when to begin taking Social Security benefits. For most people, Social Security is an important part of their retirement portfolio. When to take Social Security is a big decision and we’re glad to discuss what one should consider when making that election. We also have consultants who can review your plan with you, and information from Social Security to provide a more detailed strategy.
There are some general factors to consider when making the choice, such as one’s age, savings, Primary Insurance Amount (PIA) at Full Retirement Age (FRA) for both spouses, and health or life expectancy for each person. If one can wait on taking their benefit till they reach Full Retirement Age then more strategies will be available such as Claim Now, Claim More Later, and File and Suspend, which will allow one or both of your benefits to earn Delayed Retirement Credits. These credits will increase your benefit by a certain percentage from the time you reach FRA until you start receiving your benefits, or at age 70.
If longevity is in your family history, generally speaking, it is better to delay taking Social Security as long as possible since the benefit payment will increase by an average of 8% a year up to age 70. It’s true that there is a breakeven point, as you mentioned, and if one should pass away prior to that age, then they would have received more had they started their benefits early. But we don’t necessarily know what the future holds, and each client’s situation is unique.
I would suggest the two Fidelity Viewpoints® articles below as a starting point. These articles both provide pros and cons of taking benefits early or later, as well as some strategies for couples to get the most from their Social Security benefits. I also suggest working with one of our consultants who can run an analysis with you and discuss a strategy that is specific to your PIA, age, and longevity assumptions. This will then provide a more detailed plan along with a breakeven point and estimated cumulative lifetime income one could expect from that strategy.https://www.fidelity.com/viewpoints...https://www.fidelity.com/viewpoints...