Most Americans start drawing Social Security as soon as they’re eligible, not knowing that waiting could pay off for them and their spouse.

You can start receiving Social Security benefits at age 62 but waiting until age 70 will boost your benefits by as much as eight percent a year. “Some people didn’t realize and didn’t know they could delay,” says Colleen Jaconetti, senior investment strategist at mutual fund giant Vanguard Group. “I don’t think this option has been well publicized.”

If you’re helping a senior claim Social Security benefits or trying to devise your own retirement plan, consider the options carefully. It can be difficult to get a do-over if you make a mistake.

Jaconetti illustrates the significance of this decision with the example of someone born in 1960 who will reach Social Security’s full-benefit retirement age when they turn 67. If their benefit at age 67 is $1,500 a month, then their monthly check will grow to $1,860 per month if they wait to claim benefits until age 70. By contrast, claiming benefits early at age 62 will reduce their initial monthly check to only $1,050.

There is a break-even point when taking benefits at age 70 will outpace the amount taken early, but there is more to waiting than just gambling that you’ll live a long life. Delaying collection also means higher benefits for a surviving spouse—a critical issue, especially if that spouse has earned less over their lifetime.

Tips for Figuring Out Your Full Retirement Age

Depending on your area of work, it’s likely that your employer’s retirement age and the Social Security Administration’s (SSA’s) full retirement age are different. The universal milestone used to be 65, but the government increased it beginning with people born in 1938 or later. The age gradually increases until it reaches 67 for individuals born after 1959.

For example, if you were born in 1955, the SSA says your full retirement age is 66 and two months. You would be able to retire from work and claim your benefits now at age 62, but you won’t receive full benefits until you reach the SSA’s specified retirement age.

This is important because someone born in 1955 who is eligible to receive $1,000 a month at full retirement age will only get $741 a month if they claim those benefits at age 62. That’s a 26 percent reduction just for collecting early.

Of course, some people just can’t wait. Perhaps they’re in very poor health and unlikely to live long in retirement or they must collect these payments to survive and make ends meet.

If you’re not sure what your full retirement age is, you can use this SSA calculator to help you figure it out.


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Incentives for Delaying Social Security Benefits

The SSA makes it worth your while to wait. For example, if you were born in 1960 or later, you would only receive 70 percent of your Social Security retirement benefits at age 62. If your benefit is $1,000 at full retirement age (67), you would only receive $700 per month if you start taking benefits at age 62.

But if you wait, your benefits will increase by eight percent each year from your full retirement age until 70. If your monthly benefit is $1,000 at full retirement age (67) and you delay payments until age 70, you’ll receive $1,240 each month. (You should take benefits at age 70 because they won’t increase after that.)

You can view a table of the calculations of the impact of claiming early or late retirement benefits here: https://www.ssa.gov/OACT/ProgData/ar_drc.html.

Depending on your age and when you start taking Social Security benefits, the break-even point when delaying payments exceeds taking them early occurs after about 10 years. That may seem like a long time, but Americans are living longer thanks to healthier lifestyles and advances in medical care.

“If you think you need this money at 62, you need to put it off because you’ll really need it when you’re 82,” says Charles Sachs, a certified financial planner in Miami. “As an advisor, I’d be concerned that you might live way beyond your life expectancy.”

According to data compiled by the SSA, a man reaching age 65 today can expect to live on average until age 84.2. A woman turning age 65 today can expect to live on average until age 86.7.

To get a sense of how long you might live and how long you’ll need to stretch your retirement benefits, the SSA offers a longevity calculator on their website based on a person’s gender and current age. It’s important to note that someone who is in good health could live even longer than their estimated life expectancy.

Your Spouse Should Factor into When You Collect Benefits

It’s important to know that the decision to claim Social Security benefits has implications for your spouse too. “Many people make these decisions in isolation,” says Rita Cheng, CEO of Blue Ocean Global Wealth in Rockville, Maryland. “They don’t think of income streams together.”

For starters, widows and surviving divorced spouses whose marriages lasted 10 years or more are eligible for survivor benefits. So, waiting until age 70 to claim Social Security benefits also increases your spouse’s survivor benefits. “Most spouses don’t even realize they get a survivor’s benefit,” says Dan Mathews, a certified financial planner with Creative Planning in Leawood, Kansas. You can find more about how survivor’s benefits are calculated by using the SSA’s Survivors Planner.

In addition, spouses who never worked or have low earnings can get up to half of their retired spouse’s full benefit. For those who are eligible for both personal retirement benefits and spousal benefits, the SSA always pays personal benefits first. If your benefits as a spouse are higher than your personal retirement benefits, you’ll get a combination of benefits that equals the higher spousal amount, the Social Security Administration says.

Consider the example below, courtesy of the SSA:

Mary Ann qualifies for a retirement benefit of $250 and a spouse’s benefit of $400. At her full retirement age, she will get her own $250 retirement benefit and Social Security also will add $150 from her spouse’s benefit, for a total of $400. (Note that under a law passed in 2015, people born on or after Jan. 2, 1954, can no longer use a popular tactic that allowed a spouse to apply for one of these benefits and delay applying for the other until a later date.)

Determining when each spouse should claim Social Security can get tricky. “The answer to this question is not as easy as you might expect, particularly with married couples,” says Marty Reid, a certified financial planner with Reid Financial Consulting in Lincolnton, North Carolina. “You should explore all options with a financial planner in the overall context of your retirement plan.”

For example, Reid uses a sophisticated planning tool from BlackRock, an investment-management firm, that helps him evaluate and compare different Social Security scenarios. In one recent counterintuitive case for a healthy couple where the husband was a high earner, Reid determined that it was more advantageous for the significantly lower-earning spouse to take benefits at her full retirement than to wait until she turned 70. “That would be hard to determine without a calculation of this sort,” Reid says. “You really have to factor in the spousal and survivor benefit.”

Get Help From a Professional

In 2015, the government eliminated some Social Security planning strategies and loopholes that maximized benefits, but it’s still a good idea to ask a financial planner to assist with devising a strategy that fits a person or couple’s unique situation. “The SSA is very technical in the way they explain things,” says Mathews. “You almost need a decoder ring to figure things out.”

Reputable financial planners should also be able to accompany clients to the Social Security office if needed. “There are a lot of little technicalities that can occur,” says Julie Hall, director of financial planning for Planning Alternatives in Bloomfield Hills, Michigan. “My colleagues and I have gone with clients to the Social Security Administration to make sure they’re speaking to someone knowledgeable. You want to make sure it gets done right.”

To find a certified financial planner to assist with benefits strategies and retirement planning, visit www.letsmakeaplan.org. This website is maintained by the Certified Financial Planner Board of Standards (CFP), which sets rigorous ethical and professional requirements for financial-planner certification.