Nancy, yes the needle should be as close to the hook as possible without hitting. Some people use tin foil to make sure it's not rubbing. I just eyeball it. I took some photos and due to the rain they are terrible. However, here's a photo that maybe will help you. The tip of the hook should be in the center of the needle(eye) just as the needle bar is raised using the handwheel. I can take a better photo if need be. As you can see the needle is very close to the needle without rubbing.