I have to give the usual disclaimer for something as important as planning your life savings: I'm not a financial advisor, I have no finance background, and I spend my days as an engineer in a lab. Don't trust me with your money! :-)
These are my explorations deciding when to begin taking payments from the Social Security Administration (SSA). The first question is, will the money be completely spent, whether on necessities or on shiny gadgets and travel? The second question explored is, what happens if I invest some portion of the SSA payment?
The SSA considers age 67 to be full retirement age. For each month prior that you begin taking SSA benefits, you are penalized for life by a small percentage. Converesely, you are rewarded for delayed claims, that is, claims after age 67 by a little bit each month until it is capped at age 70. See the SSA site all the nitty gritty.
Money is a bit pointless if you never spend it. But life is harder if you don't save some, too, so where do you draw the line? Wikipedia has a page devoted to compound interest and a section named "Monthly Deposits" has an equation for compounding principal while there are monthly deposits. This is exactly what we want to explore.
In 2026, SSA says the average American can expect monthly payments at starting ages 62, 67, and 70 of $1400, $2000, and $2250. The graph above uses those numbers and shows what total SSA earnings are up through various ages (of death). It assumes you spend every last cent of income and invest nothing. The vertical dashed lines show crossover points. If you live to that age, a lot of guesswork there!, then it benefits you to wait to begin taking SSA$. In this case, it's probably worth waiting till 67 but not till age 70. The age 67/70 crossover happens at age 94, but even after that isn't significantly better. However, if you live longer than age 78, it pays to wait till age 67 to take the payments.
But now look at these two graphs. They both assume 50% of SSA income is invested. The left graph shows what happens at a 5% rate of return. The right graph at a 7% rate. Suddenly, things change! With investment, it pays to take SSA$ early and invest a portion of it. The graphs do not anticipate or take into account inflation or SSA increases.
Let's look at an American who earns a bit more than average.
With no investment, this situation is a little trickier to decide. The average American male and female have expected lifespans of 76.5 and 81.4. Study the ol' family tree and take your best guess. It seems that it might be (maybe, could be, who knows??) better to wait till 70.
Again, it's much easier when investing is part of your plan. Presumably, your income is more, so you can invest a little more. These graphs show the effects of investing 70% of SSA$ with, again, returns of 5% an 7%. Even at 5% return, taking SSA$ at 62 is worse than waiting till 70 only if you longer than 92, and the additional earnings really aren't that much better. Taking the money at age 62 looks sensible.
Let's move income a little higher to see if we can spot a trend. With no investment, the crossover ages are clustered in the early 80s. If all money will be spent as it arrives, it again comes down to how long you think you might live based on your family's lifespans.
It is even more clear with investment that taking the SSA payments immediately is the thing to do. As income increases, there is less and less decision to make. Compounding early creates more money than obtained by waiting.
If you're comfortable running python code, take my program and run it on your numbers with various combinations of investment and return percentages.
Here is the python source code for retire.py. Try it, improve it, break it! If you break it, please let me know and I'll try to fix the bug. If you improve, let me know that, too!
The program is run from the command line. Here is a sample that creates the first graph on this page:
retire.py -62 1400 -67 2000 -70 2250
meaning you want curves for age 62 at $1400/mo., age 67 at $2k/mo., etc. You can use any ages and number of age/earning pairs. Type in however many you like from your ssa.gov info.
It's easy to consider compounding from investing. To "what if" the situation with 6% return on investment and 60% of SSA income invested, use
retire.py -62 1400 -67 2000 -70 2250 -i 60 -r 6