“When should I take Social Security?” is one of the most common questions we hear from clients in Southlake and across the DFW area. It’s also one of the easiest to oversimplify.
Search online and you’ll find dozens of break-even calculators that spit out a single age and call it a day. While that number is a useful starting point, it’s rarely the right answer on its own. When we run this analysis for clients at Mills Wealth Advisors, the simple break-even is just one step of a multi-step process.
Here’s exactly how we do it, with real numbers.
Step 1: The Simple Break-Even Calculation
Every claiming decision starts with your Primary Insurance Amount (PIA), which is the monthly benefit you’d receive at your Full Retirement Age (FRA). For anyone born in 1960 or later, FRA is 67.
From there, the rules are straightforward:
- Claim at 62 and your benefit is permanently reduced by 30%, meaning you’d receive just 70% of your PIA.
- Claim at 67 and you receive 100% of your PIA.
- Claim at 70 and you earn delayed retirement credits of 8% per year, for up to 124% of your PIA.
Let’s use a hypothetical client with a PIA of $3,000 per month:
| Claiming Age | Monthly Benefit | Annual Benefit |
| 62 | $2,100 | $25,200 |
| 67 | $3,000 | $36,000 |
| 70 | $3,720 | $44,640 |
The break-even age is the point where the cumulative dollars collected by waiting catch up to the cumulative dollars collected by claiming earlier. For this client:
| Comparison | Break-Even Age |
| 62 vs. 67 | About 78½ |
| 67 vs. 70 | About 82½ |
| 62 vs. 70 | About 80⅓ |
*A quick sidenote on inflation: because Social Security’s annual cost-of-living adjustments apply as a percentage to every claiming age, these ratios hold in today’s dollars. The break-even ages don’t meaningfully change whether you model COLAs or not.*
Thus, if you expect to live past roughly 80, waiting until age 70 to claim Social Security “wins.” That’s where most online calculators stop – but it’s just the beginning for our analysis.
Step 2: Adjusting for the Time Value of Money
A dollar received at 62 isn’t worth the same as a dollar received at 80. Money you collect early can be invested, used to pay down debt, or used to avoid drawing down a portfolio during a bad market.
When we discount future benefits back to today using a reasonable real (after-inflation) rate of return, the break-even ages shift later:
| Comparison | No Discounting | 2% Real Rate | 3% Real Rate | 4% Real Rate |
| 62 vs. 67 | ~78½ | ~81 | ~82⅔ | ~85 |
| 67 vs. 70 | ~82½ | ~85 | ~86½ | ~88⅔ |
| 62 vs. 70 | ~80⅓ | ~82⅔ | ~84⅓ | ~86½ |
This is the most honest version of the “claim early and invest the difference” argument. It’s valid, but notice what it requires: consistently earning a strong real return, and actually investing the money rather than spending it. Social Security, by contrast, is an inflation-adjusted, government-backed lifetime income stream. Few investments offer that combination, which is why we don’t use aggressive return assumptions when comparing the two.
Step 3: Asking the Real Question, Which Is Longevity
The break-even age only matters in relation to how long you’re likely to live, and “average life expectancy” is the wrong benchmark for most of our clients.
National averages include people across every income and health level. People who reach their early 60s in good health, with the resources to work with a financial planner, tend to live longer than those averages suggest. And for married couples, the relevant question isn’t how long one of you will live. It’s how long the second of you will live.
When we model longevity, we look at:
- Personal and family health history
- Whether you’re planning for one life or two
- The probability of living to 85, 90, and 95, not just the average
We also reframe the decision. Delaying Social Security isn’t really a bet that you’ll live a long time. It’s insurance against the financial risk of living a long time. If you die early, you won’t need the money. If you live to 95, a larger inflation-adjusted check becomes one of the most valuable assets you own.
Step 4: Layering in Survivor Benefits
For married couples, this step frequently changes the answer entirely.
When one spouse passes away, the surviving spouse keeps the larger of the two Social Security benefits, and the smaller one goes away. That means the higher earner’s claiming decision affects not just their own income, but the survivor’s income for potentially decades afterward.
Consider a couple where the higher earner has a $3,000 PIA and the lower earner has a $1,400 PIA:
- If the higher earner claims at 62, the survivor benefit (assuming the surviving spouse has reached their own FRA) is limited to roughly $2,475 per month, since survivor benefits are floored at 82.5% of the deceased’s PIA when the deceased claimed early.
- If the higher earner claims at 70, the survivor benefit is $3,720 per month.
That’s a difference of more than $1,200 per month, in today’s dollars, for the rest of the survivor’s life. Because the benefit now pays out as long as either spouse is alive, the effective break-even for the higher earner stretches much further, and waiting becomes far more attractive.
A few other spousal rules we always check:
- Spousal benefits max out at 50% of the worker’s PIA at the spouse’s FRA. There are no delayed retirement credits on spousal benefits, so there’s no reason for the lower earner to delay a spousal benefit past their FRA.
- A common strategy is for the lower earner to claim earlier while the higher earner delays to 70, providing income now while maximizing the survivor benefit.
- Divorced spouses may also be eligible for benefits on an ex-spouse’s record if the marriage lasted at least 10 years.
Step 5: Running the Tax Math
This is where holding both CPA and CFP® credentials matters most, because Social Security claiming is as much a tax decision as a retirement decision.
Up to 85% of your benefits can be taxable. The federal formula uses your “provisional income,” and the thresholds (currently $32,000 for married couples filing jointly) have never been indexed to inflation. Most of our clients will have a substantial portion of their benefits taxed regardless, but when you claim affects how the income stacks up over time.
The gap years are a tax planning opportunity. A client who retires at 62 but delays Social Security to 70 has a window of relatively low taxable income. We often use those years to:
- Draw down traditional IRA and 401(k) balances at lower tax brackets
- Execute Roth conversions strategically, filling up lower brackets on purpose
- Reduce future Required Minimum Distributions (RMDs), which can otherwise push you into higher brackets later
In effect, spending from pre-tax accounts first and “buying” a larger Social Security check can lower lifetime taxes.
Medicare premiums are part of the picture. Medicare’s IRMAA surcharges are based on your income from two years prior, so large IRA withdrawals or Roth conversions starting at age 63 can raise premiums once you’re on Medicare. We model these thresholds carefully so the tax savings aren’t eaten up by higher premiums.
The newer senior deduction can also help. Taxpayers 65 and older can claim an additional deduction of up to $6,000 per person for tax years 2025 through 2028, subject to income phaseouts. We factor this into bracket planning during those years.
And one Texas-specific note: because Texas has no state income tax, Social Security income isn’t taxed at the state level here. That simplifies the math for DFW retirees compared to clients in many other states.
Two More Factors We Always Address
- Still Working Before Full Retirement Age:
- If you claim before your FRA and keep working, the Social Security earnings test may temporarily withhold benefits. In 2026, $1 is withheld for every $2 you earn above $24,480. In the calendar year you reach FRA, the limit rises to $65,160 and $1 is withheld for every $3 above it, counting only earnings before the month you reach FRA.
- The withheld benefits aren’t lost forever, since your benefit is recalculated upward at FRA. But for many high-earning DFW professionals, the earnings test effectively makes claiming at 62 while still working a non-starter.
- What About the Trust Fund Headlines:
- Many clients ask whether they should claim early “before Social Security runs out.” According to the 2026 Trustees Report, the retirement trust fund is projected to be depleted in late 2032, after which incoming payroll taxes would cover about 78% of scheduled benefits unless Congress acts.
- That’s a real issue worth planning around, and we often stress-test plans for a reduced benefit. But under current law, a reduction would apply as a percentage to benefits across the board, regardless of when you claimed. Claiming early doesn’t lock in protection from a cut; it just locks in a permanently smaller check. We don’t recommend making an irreversible decision based on a projected shortfall that Congress has multiple options to address.
So, Should You Claim at 62, 67, or 70?
After working through all five steps, here’s how the answer tends to shake out, though every client’s situation is different:
Claiming at 62 often makes sense when:
- Health concerns suggest a shorter-than-average life expectancy
- You need the income and have limited other resources
- You’re single, or you’re the lower earner in a married couple
Claiming at 67 often makes sense when:
- You want a middle ground between early income and a larger benefit
- You’re the lower earner and want to maximize a spousal benefit
- You’re still working and want to avoid the earnings test
Claiming at 70 often makes sense when:
- You’re in good health and have a family history of longevity
- You’re the higher earner in a married couple and want to maximize the survivor benefit
- You have other assets to fund your early retirement years
- You want to use your 60s for Roth conversions and bracket management
The Bottom Line
The break-even age is a helpful number, but it answers a narrow question: “When do the dollars catch up?” The better question is: “Which claiming strategy gives my household the most secure, tax-efficient income for the rest of our lives?”
Answering that requires modeling your specific benefits, your spouse’s benefits, your portfolio, your tax brackets over time, and your realistic life expectancy, together.
Let’s Run Your Numbers
At Mills Wealth Advisors, we build Social Security analysis into a full retirement income and tax plan, not a one-off calculator. As a firm serving families in Southlake and throughout the Dallas-Fort Worth area, we help clients make this once-in-a-lifetime decision with clarity and confidence.
If you’re approaching your 60s and want to see how the math works for your household, contact us to schedule a consultation.