October 8, 2020
By Rahul Iyer
There’s no one-size-fits-all recommendation for the appropriate time to claim social security benefits. The point at which you should claim these benefits is based on your circumstances. You can begin to claim your social security benefits as soon as 62 years old or you can wait until you are 70 years old. Waiting a little longer to claim your social security benefits may prove beneficial.
You become eligible for full social security benefits when you arrive at the full retirement age. Your full retirement age is predicated on the year in which you were born. The full retirement age for individuals who were born in 1951 or after fall between 65 and 67. For those who were born after 1959, the full retirement age is 66.
There are a few factors that must be considered when determining the appropriate time to take social security. Let us discuss a few of these factors.
Cash needs: if you are considering early retirement and you already have the resources in place to comfortably do this, you are in a position to delay taking social security. If you can afford to delay taking your social security benefits, it would be wise to do so until you arrive at the full retirement age. This make you eligible for full social security benefits.
Life expectancy: when you delay claiming your social security benefits, you will end up receiving larger checks; however, this means that you will get less checks over the course of your life. By claiming earlier, you will get more checks in your lifetime. Life expectancy is a major factor when deciding when to take social security. If you have a long life expectancy, it makes delaying social benefits more beneficial.
Income or employment status: if you are still working or receiving income from a self-employment venture, this can reduce your social security benefits in the short term. For every $2 you earn over the annual limit of $18,240, you will be charged $1. This money will be returned to you later when you arrive at the full retirement age; however, it will impact you in the short term.
There are benefits in delaying to take your social security benefits. As mentioned in this article, waiting till later to claim your benefits will make you eligible for more benefits. On the other hand, by claiming early, you will miss some of these benefits. While, in theory, it is great to delay claiming your benefits, there are a number of factors that must be considered. This includes your need for cash, your life expectancy, your employment or earning status after you claim among other things.