As individuals approach retirement, one of the most important financial decisions they need to make is when to start receiving Social Security benefits. The timing of this decision can significantly impact the amount of benefits received throughout one’s lifetime. This article will outline the eligibility criteria for full Social Security benefits, discuss the factors determining benefit amounts, and evaluate the pros and cons of taking benefits early or delaying them.

Eligibility for Full Social Security Benefits

In the United States, the eligibility age for full Social Security benefits, also known as “full retirement age” (FRA), varies depending on the year of birth:

  • For those born in 1937 or earlier: FRA is 65
  • For those born between 1938 and 1959: FRA gradually increases from 65 to 66 (add two months per year starting from 1938)
  • For those born in 1960 or later: FRA is 67

To be eligible for benefits, individuals must have accrued a minimum of 40 “credits” through their working history. In 2021, one credit is earned for every $1,470 income, with a maximum of four per year. This threshold may change over time, so keeping track of the latest updates is essential.

How Much to Expect at Full Retirement Age

The amount of Social Security benefits an individual receives at their FRA depends on their lifetime earnings. Therefore, the Social Security Administration (SSA) calculates benefits using a formula that averages the highest 35 years of indexed earnings, adjusting for inflation. The resulting figure, the Average Indexed Monthly Earnings (AIME), is then used to determine the Primary Insurance Amount (PIA) – the base figure for calculating benefits.

It’s important to note that factors such as cost-of-living adjustments (COLAs) and any reductions or increases based on claiming age will also impact the final benefit amount.   You can set up an account on the Social Security’s website to view your lifetime earnings and an estimate of your social security benefits.  Go to: Plan for retirement | SSA

Example:  You are currently age 65 and worked for 25 years at an annual salary of about $100,000 your social security benefit would be about $3,000 per month at full retirement age of 66 and 8 months.  If your annual salary in the same example at been about $50,000 per month your benefit would be about $2,000 per month.

Pros and Cons of Taking Social Security Benefits Early

Claiming benefits before reaching FRA will result in a permanent reduction in monthly payments.  In the example above it you elected to start social security benefits at age 65 your benefit would be reduced by about 10%!  However, there are some situations where this might be the right choice:


  1. Financial need: Early benefits can provide relief if an individual requires immediate income.
  2. Health concerns: Those with shorter life expectancies may benefit from claiming early to maximize the total amount received.


  1. Reduced benefits: Benefits will be permanently reduced by a certain percentage for each month claimed before FRA.
  2. Earnings limit: If an individual is still working, claiming benefits early may result in further reductions due to the earnings limit.

Pros and Cons of Delaying Social Security Benefits

Postponing Social Security benefits past FRA can lead to higher monthly payments. Still, it may not be the best choice for everyone:


  1. Increased benefits: Each year benefits are delayed past FRA (up to age 70), they will increase by approximately 8% which is an excellent return on investment.
  2. Greater spousal benefits: Delaying benefits can increase the potential survivor benefits for a spouse.


  1. Opportunity cost: Delaying benefits means forgoing income that could be used for investments or living expenses.
  2. Health and longevity: If an individual has a shorter life expectancy, they may not receive enough benefits in their lifetime to offset the delay.


Deciding when to claim Social Security benefits is a complex decision that depends on an individual’s unique circumstances. To make an informed choice, it’s essential to understand the eligibility criteria, benefit calculations, and the pros and cons of claiming benefits early or delaying them. In addition, consulting with a financial advisor can provide personalized guidance and help ensure a comfortable retirement.

Navigating Social Security Benefits: Eligibility, Amounts, and Timing
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