There are many options when it comes to taking Social Security, but only one that’s right for you. It’s one of the few retirement decisions that is nearly irreversible. Once you choose when to claim your benefits, there’s little room for flexibility.

Join David Shapiro on this week’s Better Money Boston with WCVB Channel 5 to learn how to navigate this crucial retirement decision.

Get a Customized Analysis

When does it make the most sense to collect Social Security? Well, the right choice depends on your individual situation – there’s no one-size-fits-all answer. Some people advocate for claiming benefits early, while others recommend waiting to receive the maximum payout. But like all aspects of retirement planning, your claiming strategy should be based on a customized analysis of your specific financial needs.

Timing is Everything

There are three key age milestones to keep in mind with Social Security. You can start collecting benefits as early as age 62, but this will result in a reduced monthly amount. Waiting until your full retirement age, which is typically between 66 and 67, allows you to receive your full benefit. Another option is to wait until your benefit reaches its maximum potential at age 70.

While delaying increases your monthly benefit, the total amount you receive over time depends on how long you live. In addition to your health and age, other important factors to consider include your additional sources of income, current savings, marital status, and tax situation.

Don’t Forget About Taxes

Whether you have to pay taxes on your Social Security benefits depends on your total combined income. If your income exceeds certain thresholds, 50% or up to 85% of your benefits may be taxable, which could have a significant impact on your lifetime tax liability.

Working with a financial professional can help you manage your overall financial strategy. You may discover that adjusting withdrawals from other accounts can help reduce the taxable portion of your benefits and ultimately maximize your spendable income in retirement.