Social Security can be a significant asset for the wealthy. High-income earners may receive as much as $47,800 a year per person, and $95,600 for a couple.1

Moreover, it is a lifetime annuity providing income that—although taxed—is guaranteed by the U.S. government, grows with inflation and is not tied to the markets. For perspective, the maximum benefit for a couple who are both high-earners roughly equals that of a $3.2 million bond portfolio yielding 3% on a pre-tax basis.2

How much you receive often depends in large part on your earning history. But other factors also make a meaningful difference; among the most important are:

  • When you choose to start receiving benefits
    • Start at your “full retirement age” (FRA), and you’re entitled to your full benefit
    • For every year you wait beyond your FRA to start, your full benefit will increase by 8% a year—until you reach 70 years old
    • Your FRA depends on your year of birth; see “Know Your FRA,” below
  • To whom you are or have been married
    • Even those who’ve never worked may be entitled to Social Security benefits based on their spouses’ employment histories
    • Current spouses are eligible for spousal benefits, but former spouses also may be eligible

Deciding when to start taking your benefit may seem simple, given one of Social Security’s most straightforward realities: You are allowed to receive higher benefits later or reduced benefits earlier.

But here’s a counterintuitive insight: Despite the bonus for delaying, waiting is not right for everyone. In fact, it may be wise for some to start receiving their benefits as early as age 62—the earliest age at which those who are eligible for Social Security can begin.

So how do you decide what’s right for you? Your decision depends on your finances, your plans for retirement, your health and other personal preferences.

A decision tree shows the process for determining when to start collecting Social Security. The tree poses three questions—“Do you need the funds to support your current lifestyle,” “Are you or your spouse in good health, do you expect a longer life (>80),” and “Can you reliably generate an 8% p.a. investment return?”—against a “claim timing” spectrum. The spectrum ranges between “Earlier,” “Full Retirement Age (FRA),” and “Later.”

Here, we provide a simple decision tree as general guidance to help you determine what’s right for you. However, it is very important that you base your decision on a thorough understanding of your financial situation and goals—as well as the complex rules governing Social Security.

We strongly recommend you consult with both your J.P. Morgan advisor and other professionals.

A table shows year of birth (YOB) in one column and the corresponding full retirement age (FRA) in another. A YOB between 1943 and 1954 corresponds to an FRA of 66; YOBs between 1955 and 1959 correspond to FRAs between 66 & 2 months and 66 & 10 months; and a YOBs 1960 and later correspond to an FRA of 67.