When Should I Take Social Security?

When you begin taking Social Security will affect how much you receive.

You are nearing retirement.

You know you will soon be eligible to take Social Security benefits.

Should you take them as early as possible?

This means you will get more because you will have the most years receiving benefits, right?

Wrong.

According to a recent Kiplinger article titled “What to Consider Before Filing for Social Security Early,” you will likely cost yourself money.

Really?

Yes.

Although you can begin taking Social Security at age 62, your benefits will be permanently reduced.

Waiting until your full retirement age—between age 66 and 67 depending on when you were born—will put you and your spouse in the best financial situation with your benefits.

Not convinced?

Taking Social Security early can limit future job possibilities if you choose to go back to work.

It can also negatively impact income for your spouse.

How so?

If you take Social Security early and take another job, you will have an earnings threshold at $16,920 as of 2017.

What if you make more?

Social Security will withhold $1 for every $2 you make over the threshold.

Yikes!

If you had the higher income in your family, taking early Social Security means your spouse will receive less than if you die first.

If those reasons are not sufficient, consider the amount you will receive if you wait until full retirement age.

Social Security payments will be about 30 percent higher than if you filed at age 62.

If you wait until you are 70, you will receive another 8 percent for every year you wait after full retirement age.

This could be worth the wait.

Look at your retirement savings and income streams.

Make a budget for your expenses so you will not need to tap into Social Security before full retirement age.

Work with an experienced financial planner to help you plan for your retirement goals and lifestyle.

While you are at it, take up power walking and eat a few bran muffins now and then.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Kiplinger (June 2017) “What to Consider Before Filing for Social Security Early”