Generally, people can start Social Security benefits as early as age 62—and many people do just that. Generally, many people are making the wrong choice. “The later the better when it comes to claiming Social Security,” David Blanchett, head of retirement research for Morningstar’s Investment Management division, told On Wall Street. He supports that conclusion in his new paper, “When to Claim Social Security Retirement Benefits,” recently published in the Journal of Personal Finance.

Starting benefits at age 62 provides a benefit equal to 75% of an individual’s benefit at age 66, which is now full retirement age (FRA) for Social Security. Thus, waiting those four years increases monthly benefits by one-third. After FRA, there is an 8% annual increase for waiting to start; this escalation continues until age 70, the last practical starting age.

“Waiting till age 70 is going to be optimal for lots of people,” Blanchett said. However, most seniors don’t even make it to 66 before claiming benefits. Therefore, Blanchett puts FRA as the starting point when discussing the timing of benefits, between advisors and clients. “That assumes the retiree has the funds to pay for expenses if he or she retirees before age 66,” Blanchett said.

In his paper, Blanchett finds that an individual investor who takes benefits at age 62 must achieve returns of 7% or higher in retirement in order to be better off than someone who delays until age 66, assuming an average life expectancy. In contrast, an investor taking Social Security at 66 would need returns of 4.6% or higher to be better off than someone delaying until age 70. That said, spousal survivor benefits significantly increase the potential advantage from waiting. “Delayed Social Security benefits are especially valuable for females, married couples, and investors who expect to invest in relatively conservative portfolios during retirement,” Blanchett concludes in his paper.

Of course, waiting to start benefits means forgoing cash flow that could have been spent or invested in the intervening years. “If you delay claiming benefits until age 70 and then die in your 70s, Social Security might end up being a ‘bad deal’ (from an investment perspective),” Blanchett said. However, he went on, in that scenario the decedent could still be leaving a larger Social Security benefit for a surviving spouse. In addition, Blanchett noted the peace of mind that comes from knowing there will be a decent amount of inflation-adjusted income for life.

According to Blanchett, there are some reasons for starting benefits early. “That’s especially the case if someone is going to retire and simply needs the money to provide for basic needs,” he said.  Poor health, and the likelihood of dying before collecting many checks, can be another concern. It’s possible that someone with a medical condition could be worse off by delaying, Blanchett noted, “but if you end up living longer than expected, it’s one of the best possible hedges around.”

Read More: 19 Ways to Get the Most Out of Social Security

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