When Should You Start Taking Social Security?

The time when you feel as though you've been working for as long as you can remember and are longing for the respite the proverbial golden years will provide is nigh. You know you're eligible for Social Security (SS) benefits, and you're thinking about when you should start taking the income you've worked so hard to earn. But when you go to weigh your Social Security options — depending on a number of factors, of course — you may decide that you can survive the workforce for a few more years if it means getting a bigger monthly benefit.

 

If you cannot delay your retirement until age 70, remember than if you were born after 1959 (making your full retirement age 67), and you elect to start taking SS benefits at age 62, your monthly benefit is cut by 30 percent.

 

Your Options

The earlier you begin taking Social Security benefits, the smaller your  monthly payouts will be. Conversely, the longer you wait, the higher the monthly benefit will be. If you defer your benefits until the maximum age of age 70, your monthly benefit could be as much as double what your “full retirement age” payout would provide. No mater your choice, you'll receive the same amount of money from the Social Security Administration (SSA) — if you take your funds early, they'll need to last longer; if you take a later withdrawal, the money you would have earned has simply accrued to a higher amount, due to your older age.

 

What Is Your Full Retirement Age?

While you can start withdrawing SS benefits as early as age 62, if you were born before 1937, your “full retirement age,” as determined by the SSA  is age 65. If your born after January first of 1960, your full benefit age is 67.

 

How Much Can I Save by Delaying Retirement?

You can earn quite a bit more per month by taking your benefits later — even if by just a few years — than your full retirement age. This is because the government affords you what's called delayed retirement credits, allowing older beneficiaries to increase their benefit payouts. Depending on your year of birth, you accrue a sizable yearly rate of increase in your benefit amounts. So, if you were born in 1935-1936, your increase is valued at 6.0 percent. If your birthday was in 1941 or 1942, you'll receive a yearly increase of 7.5 percent. If you were born in or later than 1943, every year you defer payment earns you an increase of 8 percent annually.

 

If you cannot delay your retirement until age 70, remember than if you were born after 1959 (making your full retirement age 67), and you elect to start taking SS benefits at age 62, your monthly benefit is cut by 30 percent. If you can wait to age 66, however, you'll only lose 6.7 percent of your benefit.

 

Important Factors to Consider

According to the SSA, you should ask yourself the following questions when determining when you plan to begin drawing benefits:

●      Are you still employed? If so, could you see yourself working a few years more, or are you ready to get the heck out of there?

●      How is your health? There's no point in continuing to try and work if you've somehow become physically disabled, but if you still feel well, some extra time at work could be well worth it.

●      Does your family have a history of longevity? Taking family history into consideration is important, but you're really just making an educated guess with all these methods. 

●      Will you still have health insurance if you retire early? You won't be eligible for Medicare until you're 65, so if you want to stop working at age 62, be sure to consider how you'll cover your health care expenses in the interim.

●      What other retirement assets to you have? If you've been planning for awhile and have an annuity, pension, or 401(k) to supplement your income, taking an early Social Security benefit may be a choice.

●      Will any other family members qualify with you on your record?

 

If you need help with figuring out when the optimal time is take your Social Security, call my office and we can walk you through your individual strategy.  You can also learn more about Social Security by visiting the website, www.SSS.gov.

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