When To Claim Social Security? 8 Things to Consider
Retirement is here or getting close, so when is a good time to claim Social Security? That is a question that is personal to everyone. Should you start at age 62 or 66 or get the maximum benefits at age 70? It is not a one-size-fits-all answer to this complex question. You should think about your situation, how much you have saved for retirement already, and the benefit of claiming it early versus later in life.
Here are 8 Things to consider when deciding when to claim Social Security.
What’s At Stake, Money Wise?
Suze Orman talks about what things could be at stake when you decide to take the money. “At your full retirement age (67 for everyone born in 1960 or later) your benefit will be 30% larger than if you start at age 62,” she continued. “Moreover, if you wait all the way until you turn 70, your benefit will be 76% higher than if you start at age 62.”
Full retirement means getting 100% of your benefits at age 67 (if born after 1960) and 70% at age 62. If you delay, the benefit amount will increase until age 70, when it will be 124% of the max benefit.
It may be wise to take it later for more money, but will it matter if you do not make it to age 70? The question is are you willing to sacrifice more time of life for more money. Then you have to think about if you need more money in retirement.
1. Life Expectancy
Starting early will mean you get more checks throughout your lifetime. Delaying will allow you to have larger checks. The question is, how long do you expect to live in that lifetime? Men are expected to live not as long as women, which is a consideration. Then you must do some math to see what is best in the long run.
2. Women Should Consider Delaying Benefits
Statistics show that women often outlive men. Women who make it to 65 in good health can often make it into their 80s. That way, they can maximize their money as they go throughout retirement.
3. Spousal Benefits
One of the things with social security is the spousal benefits. If one spouse dies, the other can inherit their spouse’s social security benefits only if it is higher. So you will get the higher of the two benefits. This means it could be better to postpone the benefits to have higher benefits for the younger and longer-living spouse.
4. Delay If You Have Other Sources of Income
If you have other sources of income you may choose to delay benefits. These other sources could be you are still working, investment income, or other places of income.
5. Receive Benefits Early For Investments
You can easily do some calculations and see if you can make more money investing the money instead of waiting for maximum benefits. Many people may start to collect early and invest it in the market. This could be more beneficial and reap more in the long run than waiting an extra 5-8 years for maximum benefits.
6. Need of Income
Many people may start claiming at age 62 because they need the money. Maybe a job was lost, or you are unable to work. Money is a need if you have no other income sources. So you will need to claim the money earlier than expected.
7. What is the Future of Social Security
The Social Security Trust is well-equipped to cover 100% of benefits up to 2034. At that point, Congress needs to start cutting future recipients’ benefits. That could be by raising the retirement age or cutting the amount people will be guaranteed.
8. Planning Ahead For Social Security
As people start to get closer to retirement, plans should be implemented to maximize the money’s benefits—plans for if you pass away or when to withdraw it. Proper planning is vital for retirement funding, so make sure to do the calculations, talk to a financial planner if needed, and get it ready for Social Security withdrawal.
Social Security Cuts Are Coming: 9 Expenses That Retirees Should Avoid
Social Security cuts can come in many forms. Most people would think that their benefits are cut, but in other ways, thelegislature could raise the retirement age, meaning less money in the long run for those getting Social Security. The proposal to raise the retirement age has about 170 members of Congress backing it.
Social Security Cuts Are Coming: 9 Expenses That Retirees Should Avoid
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Retire Like Royalty: Top 15 Spots to Live Comfortably on Social Security
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Retire Like Royalty: Top 15 Spots to Live Comfortably on Social Security
