Timing the Start of Your Social Security Payments

Written by: Scott Sery

The Social Security program helps a great number of people when they reach retirement.  For some who have failed to plan adequately, it is their only source of income when they are done working.  For others, it is a nice bonus every month because they already have significant assets that they can draw from.  The program is designed that a person who reaches full retirement age (65 to 67 years old) will have some of their basic needs met.  Those who retire early can begin collecting their share at age 62, and those who have other sources of income can defer their payments as late as age 70.  The longer a person waits, the more they will receive in their payments (after age 70 the amount no longer grows).  Depending on a person’s situation, the right time to collect payments will vary.

Taking Social Security at 62

Sometimes people retire early because they have planned accordingly.  Other times people retire early because they can no longer work.  Those who were disabled earlier in life might not have had a chance to accumulate enough retirement assets to provide for themselves.  They have very little savings, and they need to start collecting their Social Security checks sooner.   While waiting to collect on the social security payments until age 70 will provide more of an income, there are many people who simply need the money now.  Even for those who do not necessarily need the money, they may want to collect now if their life expectancy is not very long.  For those who have an illness that may result in death in their mid 70’s, collecting Social Security sooner will allow them to collect as much as possible.

Taking Social Security at 70

The longer you wait to take your Social Security, the more you will receive in monthly benefits.  Full retirement age is between age 65 and 67, depending on what year you were born, this is when you will receive your full benefit.  You get a reduced benefit for taking it early, and an increased benefit for waiting.  If you think you will live well into your 90’s or later, taking your social security payments with the increased benefit will be best in the long run.  Over your lifetime you will end up collecting more.  Likewise, if you are still working, delaying your benefit is usually the better option.  If you make too much before your full retirement age your benefit may be reduced, after that your benefit may be taxed.  It is often best that if you are able to provide enough of an income without it, then defer it as long as possible. wait

Social Security is a great help to many people, and there are a lot of people who simply could not survive without it.  For those who are still working, it will most likely still be around when they retire.  Maybe not in the capacity they would like, but it should still be there.  If you are worried that it may go away, take it early.  If you need the money to survive, take it early.  If not, then wait as long as possible.


Timing the Start of Your Social Security Payments

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