Diagnosed at 63: Should You Claim Social Security Early or Keep Working?

A reader in their early 60s with a lymphoma diagnosis has asked one of the hardest money questions retirement can produce: should they start collecting Social Security next year, or keep working and let the benefit grow? Their stated plan is to keep working for as long as they can and invest the benefits while the paychecks continue.

The central trade-off is timing. At 63, this person can already claim, but the monthly check shrinks for anyone who claims before full retirement age, which is 67 for people born in 1960 or later. Claiming at 62 would cut the benefit by roughly 30 percent for life. Each year a person waits past full retirement age adds about 8 percent, up to age 70. Those increases are guaranteed and adjusted for inflation, which is difficult to match with a portfolio of stocks and bonds.

The idea of claiming early and investing the difference deserves skepticism. Investment returns are not guaranteed, and benefits can be partly taxable depending on total income. There is also a catch for anyone who claims before full retirement age and keeps working. The earnings test temporarily withholds benefits when wages exceed an annual limit, so a person who is still earning a full salary may receive less than expected in those years, and the withheld amount is not simply lost, since it is credited back through a higher benefit later.

Health adds a further layer. A serious diagnosis can shorten the period over which benefits are paid, which some people weigh in favor of claiming sooner. It can also reduce how long someone can keep working. If illness makes work impossible, Social Security Disability Insurance is a separate program with its own rules. Some lymphomas can qualify under the Social Security Administration's medical listings, depending on type, stage and treatment, so a medical team or benefits counselor can help clarify whether an application makes sense. Health coverage matters too. Medicare begins at 65, so anyone who leaves job-based insurance before then needs a bridge plan.

For couples, the decision can affect a spouse's spousal and survivor benefits, which makes a joint review more important still.

There is no single correct answer, but there are practical steps that help. Create a my Social Security account at ssa.gov to see official benefit estimates at different claiming ages. Ask the agency about disability options if work is becoming harder. Consider a fee-only financial planner, who is paid for advice rather than product sales, and bring a clear picture of savings, expected expenses and treatment plans. The right choice depends on those specifics, and a decision made with good information is usually better than one made under pressure.