Donald C. Reutemann CFP®, RPA

(518) 688-2223

Retirement Read Time: 3 min

When Should You Take Social Security

The Social Security program allows you to start receiving benefits as soon as you reach age 62. The question is, should you?

Monthly payments differ substantially depending on when you start receiving benefits. The longer you wait (up to age 70), the larger each monthly check will be. The sooner you start receiving benefits, the smaller the check.

From the Social Security Administration’s point of view, it’s simple: if a person lives to the average life expectancy, the person will eventually receive roughly the same amount in lifetime benefits, no matter when they choose to start receiving them. In actual practice, it’s not quite that straightforward, but the principle holds.

The key phrase is “if the person lives to average life expectancy.” If a person exceeds the average life expectancy and has opted to wait to receive benefits, they will start to accumulate more from Social Security.

The chart shows how Social Security benefits accumulate for individuals who started to receive at ages 62, 67, and 70. The person who started to receive benefits at age 62 would accumulate $327,600 by the age of 85. Conversely, the person who started to receive benefits at age 70 would accumulate $386,880 by the age of 85. The example assumes a retirement benefit of $1,625 at age 67. It does not assume COLA.

Source: Social Security Administration, 2022

There is no single “right” answer to the question of when to start benefits. Many base their decision on family considerations, economic circumstances, and personal preferences.

If you have a spouse, the decision about when to start benefits gets more complicated – particularly if one person’s earnings were considerably higher than the other's. The timing of spousal benefits should be factored into your decision.

When considering at what age to start Social Security benefits, it may be a good idea to review all the assets you have gathered for retirement. Some may want the money sooner based on how assets are positioned, while others may benefit by waiting. So, as you near a decision point, it may be best to consider all your options before moving forward.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

Weighing the Benefits of Prepaid Debit Cards

Weighing the Benefits of Prepaid Debit Cards

It's important to understand the pros and cons when considering a prepaid debit card.

How Will You Be Remembered?

How Will You Be Remembered?

How are you protecting your own memory through adequate legacy planning that will pass your gains safely on to your family.

The Pros and Cons of Banking Your Money

The Pros and Cons of Banking Your Money

The Pros and Cons of Banking Your Money

 

Have A Question About This Topic?







Thank you! Oops!

How Will You Be Remembered?

How are you protecting your own memory through adequate legacy planning that will pass your gains safely on to your family.

IRA Withdrawals that Escape the 10% Tax Penalty

The list of IRA withdrawals that may be taken without incurring a 10% early penalty has grown.

Layers of Protection

Take these five steps to protect your financial well-being before making any other changes.

View all articles

Potential Income from an IRA

Estimate your monthly and annual income from various IRA types.

How Much Home Can I Afford?

With a few simple inputs you can estimate how much of a mortgage you may be able to obtain.

Comparing Investments

This calculator compares the net gain of a taxable investment versus a tax-favored one.

View all calculators

Your Cash Flow Statement

A presentation about managing money: using it, saving it, and even getting credit.

Investment Strategies for Retirement

Investment tools and strategies that can enable you to pursue your retirement goals.

Principles of Preserving Wealth

How federal estate taxes work, plus estate management documents and tactics.

View all presentations

Once Upon a Goal

Do you know how to set up your financial goals for success? This knight does.

RE: Retirement

How does your ideal retirement differ from reality, and what can we do to better align the two?

When Do You Need a Will?

When do you need a will? The answer is easy: Right Now.

View all videos