When Should Baby Boomers Cash in on Social Security Benefits

Retirement Social Security Benefits

One of the most pressing topics being discussed at dinners and social gatherings attended by baby boomers relates to the best age to begin applying for social security benefits. The reason this discussion is so common is that there is no single answer that works for everyone.

Full Retirement Age Based on Birthdate

Before you begin the decision-making process, it is a good idea to determine exactly when you qualify for full retirement benefits.

Based on the year you were born, below is the current full retirement age data.

If you were born during 1937 or earlier, then your full retirement age is 65.

If you were born from 1938 to 1942, you add 2 months to your 65th birthday for each year since 1937.

If you were born from 1943 to 1954, then your full retirement age is 66.

If you were born from 1955 to 1959, then you add 2 months to your 66th birthday for each year since 1954.

If you were born in 1960 or later, then your full retirement age is 67.

The Case Against Taking Your Social Security Benefits Early at Age 62

While there are valid reasons for taking your social security benefits as soon as possible, most conventional wisdom that is strictly based on the numbers backs the idea of waiting until your full retirement age to apply for benefits.

Below are the main arguments made against taking social security benefits early.

1. Your benefit amount is reduced permanently.

Based on your full retirement age, Investopedia reports that retirees who decide to take benefits at age 62 stand to get a check that is as much as 30% lower than the amount they would receive if they waited for full retirement age to apply for benefits. Granted, this may not matter if you die young. CDC reports that the life expectancy for the U.S. population based on the first half of 2020 is 75.1 years for males and 80.5 years for females.

Baby boomers interested in putting the payout odds in their favor are forced to put on their actuarial hat to consider their health and the likelihood of how long they expect to live as a way to decide the impact of lower benefit payouts over time. By using simple math, you can calculate a breakeven point to determine how long you have to live to be harmed by taking early retirement. By comparing the added benefit of getting extra payments from the age of 62 with the full retirement check amount received at full retirement age, you can decide which strategy is likely to yield the best results.

 2. You increase the odds that you will not have enough money to survive later in life.

Far too many boomers will face the ugly reality of running out of money before they pass away. In the early years of retirement, retirees typically spend more money traveling and helping out young adult children as they get settled in retirement life. Once the 401K money runs dry and retirees are left to survive primarily on social security income, securing a larger benefit payment can make a significant difference in lifestyle. Since social security benefits are promised to us forever, it makes sense to focus on maximizing that retirement resource.

3. Early retirees that continue to work face strict income limits.

Zacks reports that early retirees can’t earn more than $14,460 annually if they want to continue collecting the full amount of their social security check without paying a penalty. Boomers face the prospect of losing $1 for every $2 earned in benefits if they go over that 2012 legal limit.

4. Your spouse might suffer financially.

A spouse receives the higher of their own benefit or 50% of their deceased spouse’s benefit. It is easy to see how early retirement can reduce benefit amounts and have a devastating impact on the surviving spouse who is dependent on that income.

The Case for Taking Your Social Security Benefits Early

1. You currently need the money to pay bills.

If you have lost a job and are struggling to find a new one, then it makes sense to apply for social security benefits as a way to stabilize your income. It’s common knowledge that it is much harder to find a good job as you grow older. A surprise layoff for boomers can be devastating.

2. You want the money to start a business.

It is not unusual for boomers to decide to start a dream business they have been thinking about prior to retirement. A steady social security check can provide the necessary financial support that a budding entrepreneur needs to pursue that dream.

3. You’re unlikely to live long.

If your doctors are giving you grim news and it is unlikely that you will live much longer, then it makes perfect sense to start taking your benefits as early as possible. Many people die in their 60s leaving most of their hard-earned social security benefits on the table.

4. You have debt to pay before you retire.

In the majority of cases, it makes sense to pay off your debt before you retire. Claiming social security can help you accomplish this important goal. It is particularly important to pay down high-interest rate debt to stabilize your financial future living on a fixed income.


Boomers anticipating retirement must make some final financial decisions to ensure a stable and enjoyable lifestyle during their golden years. It is crucial that people carefully examine their options related to decisions about when to apply for social security based on health, personal goals, and unique circumstances as a way to maximize the social security benefits earned.