When should you start Social Security (SS)?
Posted on September 26, 2025

A friend, age 62, asked me, “When do I start Social Security?” I didn’t give her a concise answer. Here is what I should have said:

 

• You should START Social Security when you hit the amount you want to be able to spend at the start of retirement – your target for the total you get from 1) your Social Security benefit and 2) proceeds from the sales securities for your Safe Spending Amount (SSA, Chapter 2, Nest Egg Care [NEC]).

 

• The financial argument to delay to get a better SS benefit is weak. I calculate that it’s 18 years for the returns on the added monthly benefit you get from DELAY to catch up and pass the growth of the added lump of cash you get when you START SS NOW. And it may be more years. Your breakeven age is your mid to late 80s – maybe longer.

 

 

 

• If you were to pick ages with better returns from delay and lower breakeven age, you’d focus on starting SS at age 64 and age 67. You get the highest rate of return after your benefit increase jumps 33% at age 64. Your increase jumps 20% at age 67.

 

 

Details:

 

== ~18 years to breakeven ==

 

It’s ~18 years for DELAY to return more than START NOW, and it is easy to argue that it can be more years: it’s not a great decision to delay the start of SS. That’s a much longer breakeven point than many state. This article says the breakeven point is 10.4 years at any age and for any period of delay. I disagree.

 

This and other calculations make two mistakes:

 

• They don’t assume an investment return for the two options of START SS NOW and DELAY.

 

– If you START SS NOW, you get, in effect, a lump of cash that you get to keep invested in your portfolio for the rest of your life – and your heirs have it for another ten years.

 

 – If you DELAY, you must sell securities from your portfolio to replace the cash you would have gotten from your SS benefit for your spending, but then you get, in effect, more added into your portfolio each month from the monthly benefit increase for the rest of your life.

 

• They overstate the percentage increase that you’ll get when you DELAY. You only get an increase of 8% (or more) in annual benefits at specific ages. The average annual rate of increase in benefit from DELAY for the 96 months from age 62 to 70 is 7.2%.

 

== I assume 5% real portfolio return/year ==

 

Your expected portfolio return in retirement is based on your mix of stocks vs. bonds. At a mix of 75% stock and 25% bonds, your annual real expected portfolio return is 5.9% (75% * 7.1% + 25%*2.3%). The long run real return rate for stocks is 7.1% for stocks and 2.3% for bonds.

 

I used 5% real return in the graph above: you earn 5% per year on the lump you get to keep in your portfolio by starting SS, and you earn at 5% per year on the added monthly benefit if you delay.

 

Over the past ten years, the annual real return for this portfolio mix has been 6.6%. If I use 6% real return, the breakeven is 21 years.

 

== I assume 8% rate increase in benefits ==

 

I simplified and used 8% annual increase rate in benefits in the graph above. It’s really more complex than this.

 

For the graph I assumed the annual rate you’d earn if you delayed when you turned age 67 (your “Full Retirement Age”). I assume your SS benefit is $3,000. You earn 2/3% per month increased benefit ($20/month) or a simple 8% return rate for any length of delay. (Breakeven would be the same for any amount of delay.) You decide to delay a year. For a delay of 12 months, your monthly benefit is $240 more for the rest of your life: $3,240 per month.

 

== Why more complex? ==

 

Each of the 96 months from age 62 to 70 has a different return rate from Delay and a different number of years to breakeven. My use of 8% is more favorable to Delay than the average of 7.2%.

 

SS calculates your monthly benefits based on your age when you start. SS calculates three amounts for changes in monthly benefit. You get one of two lower amounts if you start SS before age 67, 0 months. You get a greater amount per month if you delay up to the maximum benefit at age 70.

 

The same dollar-increase in benefit each month results in a different percentage increase in benefit based on your age. The annual rate that you get from delaying the start SS plots as three decaying series of returns starting at age 62, 64, and 67. You can read more here.

 

 

== Different age to breakeven ==

 

Breakeven years and your age to breakeven depends on the return rate from delay, and that’s based on the age you are when you choose to delay. The youngest breakeven age is 81 at age 64. The oldest breakeven age is over 90 late in the year you are 66 and after age 68.

 

 

== Two step increases in monthly benefit ==

 

You get the best benefit from Delay when you get a bump in the monthly increase to the highest rates of return for Delay. Your benefit increase jumps in two months: the months you turn 64 and 67. Your monthly benefit increase jumps 33% at age 64, 0 months from the one you get at age 63, 11 months. Your benefit increase jumps 20% at age 67 from the one you get at age 66, 11 months.

 

== Tax benefits from Delay are weak ==

 

I give credit for my estimate of tax benefits of Delay. The tax benefits lowered the breakeven point from 20 years to 18. I conclude tax benefits from Delay are weak.

 

Distributions and conversions to Roth from your IRA are taxed at a lower effective tax rate before you start on SS: most of your distributions and amount you may want to convert are not low tax after you start SS, since they drive up the percentage of SS that is taxed.

 

Distributions earlier than the time you must take RMD lower the amount in your Traditional IRA and lower future RMDs. This can help avoid the creep to higher marginal tax bracket and helps the top 10% of retirees with large Traditional IRAs avoid IRMAA tripwires.

 

 

Conclusion. Start SS when you are ready to retire: you have saved enough and invested well. Your Safe Spending Amount + your Social Security benefit meets your goal for the amount you want to spend in retirement.

 

If you’ve met your goal, start SS. At that point, it’s an investment decision whether to delay, and it’s not a great investment. It takes 18 years to breakeven – when you gain more from delay than from starting SS now. And it can be more years. Your age to breakeven is your mid 80s, maybe longer.

 

I would NOT choose to delay other than the delay to age 64.0 and 67.0. (You get a bump in monthly increase at those two ages.) I would ALWAYS favor taking the cash from SS for our spending to keep more in our portfolio: the Most Harmful Sequence of return would deplete a portfolio to less than half in real spending power in six years. Frightening!