When to take Social Security

Retirement » Basics » When To Take Social Security

It may be the most pervasive question of retirement planning: When should I begin taking Social Security?

If you start collecting at the earliest opportunity -- age 62 -- you'll receive a permanently reduced benefit.

If you wait until your full retirement age, you can collect 100 percent of your benefit. You may lock into an even higher monthly check by delaying Social Security longer still -- until age 70.

Determining which option is right for you depends on a number of variables, including your life expectancy, financial picture and -- according to economists at the Center for Retirement Research -- gender and marital status.

Early Social Security can cost you

If your full retirement age is 67, you'll get a reduction of:

  • About 30 percent if you start collecting at 62
  • About 25 percent if you start collecting at 63
  • About 20 percent if you start collecting at 64
  • About 13.3 percent if you start collecting at 65
  • About 6.7 percent if you start collecting at 66

Source: Social Security Administration

Put it off

Generally, financial advisers say it's best to postpone Social Security benefits as long as possible, at least until your full retirement age as determined by the Social Security Administration, or SSA.

Today, that ranges between ages 66 and 67. Those born in 1938 or later see full retirement age gradually climb to 67.

"Social Security is like longevity insurance," says Brent Neiser, a certified financial planner and senior director at the National Endowment for Financial Education. "It's a stream of payments that will not stop throughout your life, so delaying your benefits to keep those payments as large as possible forms a helpful base to your retirement plan."

In fact, he notes, those who undersaved for retirement should use whatever means possible to postpone their Social Security benefits until after their full retirement age to help boost future income.

If your full retirement age is 66, for example, you'll receive 108 percent of your monthly benefit by delaying Social Security until age 67.

If you wait until age 70, it jumps to 132 percent.

"You can use personal savings to help bridge the gap, but ideally you should plan to work a little longer (and delay Social Security)," says Neiser. "Not only does that save you money -- since you're not drawing money down from your retirement accounts -- but you're potentially adding more to it. Plus, you'll collect larger Social Security benefits (down the road.)"

Another benefit of working longer? Medicare.

Aging Americans become eligible for federal health insurance coverage at age 65. In the meantime, they can get insurance through Obamacare, as the Affordable Care Act is often called, but premiums may be pricey.

"If you stop working at age 62 and lose health insurance (from your employer), you have to get supplemental insurance to bridge the gap until you turn 65 and Medicare kicks in," says Neiser.

Paying for such insurance can quickly deplete your savings.

Do you plan to work during retirement? If so, you have another incentive to delay collecting Social Security. Earning too much at a job after you begin collecting Social Security can negatively affect your benefit.

If you are under full retirement age for the entire year, the government deducts $1 from your benefit payment for every $2 you earn above the annual limit. For 2014, that limit is $15,480.


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