Taking Social Security early may not be the best move except in a few situations.
You are getting older.
As such, you are reaching the time when you could begin taking Social Security.
You are eligible to file when you are 62.
Surely the earlier you file, the more money you will get.
According to a recent CNBC article titled “Here's when it makes sense to claim Social Security early,” this assumption is false.
Full retirement age is either 66 or 67, depending on when you arrived on the planet.
If you wait until after full retirement, then your benefit will grow by 8 percent per year.
What does this mean?
If you wait until you are 70, then your benefit will increase by 132 percent.
It is a calculated risk.
This will certainly encourage you to get some exercise and eat a few bran muffins, yes?
What if you know you will not live a long time?
What if you are single and terminally ill?
This would be a situation when taking Social Security at the earliest opportunity would be a smart choice.
What if you are married?
Taking the early Social Security would permanently reduce the survival benefit for your spouse.
Your surviving spouse can begin filing at age 60 for your benefits.
The amount will be reduced.
Much like personal Social Security, the spouse will receive the full benefit if they wait until they reach full retirement age.
If you were born before January 2, 1954, you can delay your own Social Security until full retirement age and receive the spousal benefit early.
If you are born after, this does not apply.
You must choose either your benefit or the benefit of your spouse.
When you choose to receive Social Security will also affect your annual cost-of-living adjustment.
As you can see, there are many factors to consider.
Work with an experienced estate planning attorney to determine what is best for your situation.
Reference: CNBC (March 10, 2018) “Here's when it makes sense to claim Social Security early”