When should you claim Social Security — at 62 or 70? This post covers the full math, including a life-expectancy-based break-even calculator with realistic investment projections. Use the updated calculator below to compare early claiming vs delaying.
Should You Claim Social Security at 62 or 70?
Choosing when to start Social Security benefits is one of the most important financial decisions you’ll make in retirement. Delaying until age 70 boosts your monthly benefit by up to 32% compared to claiming at 62. But is it always the smarter choice?
The Traditional Break-even Approach
Let’s assume your Full Retirement Age (FRA) benefit is $1,400/month:
- At age 62: ~$1,050/month (25% reduction)
- At age 70: ~$1,850/month (32% increase)
The Missing Variable: Investment Growth
Most break-even analyses ignore what happens if you invest early benefits. If you claim at 62 and invest each monthly payment, your total value could exceed delayed claiming — even if you live past 81.
How to Calculate Future Value Accurately
You can’t just use the simple compound interest formula, because you’re investing monthly — not all at once. Instead, we use the future value of a series formula:
FV = P × [((1 + r)^n - 1) / r]
- P = monthly payment (e.g., $1,050)
- r = monthly return (e.g., 6% annual → 0.005 monthly)
- n = number of months invested (e.g., 96 months = 8 years)
This gives us the total future value at age 70 — the point where delayed benefits begin. We then compare both strategies (with and without investment) to your life expectancy.
Life Expectancy Changes Everything
Once you factor in how long you expect to live, the better strategy becomes much clearer:
- If you live only to age 80, early claiming + investing will likely win.
- If you expect to live to 90+, delaying could be better.
That’s why our updated calculator below includes life expectancy input.
