Social Security Benefits and When To Take Them

An always popular question with taxpayers is at what age someone should start receiving Social Security benefits. The short answer is that it depends.

Statistically speaking, most seniors would be better served by waiting until age 70 to begin taking their Social Security retirement benefit. But this does not hold true for everyone. In certain instances, claiming early makes a lot of sense. A person with one or more chronic health conditions may not live to see the average life expectancy in the U.S. of almost 79 years. Thus, an early claim even at a significantly reduced rate can still lead to a retired worker maximizing what they receive over their lifetime from Social Security.

However, there are also many scenarios in which claiming Social Security benefits early would be a terrible move. Here are some examples:

  1. You’re still working, in debt, and want the additional income stream

The “retirement earnings test” holds back a certain amount of Social Security benefits for those that are still working, defeating the purpose of taking benefits early.

  1. You’re wealthy

If you already have enough money and will not be relying on Social Security to meet your need then taking benefits early would make no sense.

  1. You’re in excellent health

While none of us know how long we are going to live with many Americans now living into their eighties it usually pays for those in excellent health to hold off a little longer before taking benefits.

  1. You’re the higher earning spouse

Claiming Social Security before full retirement age could reduce the survivor benefit for a lower earning spouse should the higher earner pass away first.

  1. You think that Social Security is running out of money

While it is well documented that it has issues if Americans continue to work the Social Security program will be funded. Any possible reduction in benefits will not occur at least until the year 2035 according to experts.

For most people, the reasons to take Social Security at a later age far outweigh the reasons to take it at age 62. However, everyone’s financial situation is different, and those who are uncertain about such an important decision should seek the advice of a financial professional.