When should you start taking your Social Security Benefits?


There are a lot of misconceptions about social security: What is the current full retirement age, when is the best time to start taking benefits, etc. I know a lot of you do not know that the full retirement age is not still 65. For people born 1960 or later, full retirement is now 67 years old. Full retirement age is the age at which you can receive full social security retirement benefits. Taking benefits before you reach full retirement age may not be in your best interest. And, while the longer you wait to start taking benefits, the more benefit you will receive; waiting until 72 to get the highest benefit dollars may not be a smart decision either.

Strategies for maximizing benefits can get pretty complicated, so it is a good idea to work with your financial planner to see how the different scenarios pan out for your particular situation.

Penalty for taking Social Security Early: You can choose to receive your Social Security check up to 36 months prior to your full retirement age. Be aware that your benefit is permanently reduced by .56% (just under 1%) for each month. If you combine that impact for the 36 months that you are receiving early benefits, you have given up 20% of your total benefit had you waited until full retirement age. That is a significant reduction of benefit dollars over the entirety of the rest of your life….

Credit for waiting: On the other hand, if you wait until somewhere between your full retirement age and age 70, you will get a credit of 8% per year multiplied by the number of years you waited. Wait 2 years and that is worth another 16% of additional benefit. Wait even longer and the additional benefit gets worth even more.

Factors to consider:

  • Your Cash Needs
  • Your life expectancy/your state of health
  • What is your break even age
  • Your spouse’s age and health

The social security Administration has several calculators that will help you estimate your benefits.

Visit the website today www.ssa.gov and discuss your planning with your financial planner today to make sure you make the correct decision about your social security benefits.


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