You Can’t Rely Solely on the Math.
It’s an important question: “When should I start claiming Social Security benefits?”
Years ago, the answer was simple. All it would take was a quick calculation. But Social Security rules have changed over the years, making the issue quite complicated.
The youngest age at which you can begin to receive Social Security retirement benefits based on your own work record is 62—but you’ll get only 75% as much as if you waited until Full Retirement Age. And even your FRA amount isn’t the highest benefit you can receive. Indeed, wait until you’re 70 and you’ll get 132% of your FRA amount.
So the question is: Should you take a smaller check at 62 or wait for a larger check at FRA or delay even further to age 70?
The answer: It depends!
You’ll need to consider the following questions:
- How long will you live? (Good luck answering that one)
- How long will you work?
- Is yours a dual-income family?
- Do you have a blended family?
- Do you have multiple sources of income?
Personal factors can outweigh the math—your age, your spouse’s age, work history, life expectancy, survivor needs, taxes, give-backs and projected income returns. It’s just too simplistic to decide to wait a year before you start collecting your benefit just because you’ll get more money by waiting. What if you die in the meantime? What if you really need the income now?
There are other considerations as well—spousal benefits, survivor benefits, child benefits, and even divorced spouse benefits. Given all these complex factors, you might consider working with an independent fee-based financial planner to determine what is best choice for you.