If you’re nearing retirement, you’re probably starting to think about when you should claim Social Security benefits. Social Security benefits are generally available to individuals with at least 40 earned credits, which is equivalent 10 ten years of employment.
While there’s no right or wrong answer of when to start claiming your benefits, there’s a lot to consider. You can claim Social Security as early as age 62, but your monthly benefit will be permanently reduced. Many choose to wait until full retirement age at age 66 or 67, when they would receive full benefits and they’re eligible for Medicare. But if you can hold off until you’re 70, you’ll receive the highest possible payout.
Factors to Consider When Determining When to Take Social Security?
What’s right for your friend or your neighbor may not be right for you. Consider these factors before deciding when to claim Social security benefits:
Your financial needs
Take a look at your investment portfolio and your sources of income. If you feel like you’re in a good place, you may be better off delaying your Social Security a bit so you can maximize your benefit.
On the other hand, if you’re struggling to make ends meet, claiming Social Security benefits early could be just what you need to ease financial stress. But remember, if you claim your benefits early, you’ll be permanently locked into a lower payment. Finding another source of income in the meantime — and delaying receiving Social Security benefits — could yield a higher overall payment.
Your health
It’s not an easy element to consider, but your health can play a large role in your decision of when to claim Social Security benefits.
Individuals who are in good health and expect to beat the average life expectancy are likely better off delaying taking Social Security. That way, monthly checks will be larger, which will help with long-term finances — because living well into your 80s or 90s could mean your retirement savings may start to dwindle.
But if you’re in poor health, or you have a family history of certain diseases or illnesses, claiming Social Security benefits early might be best for you.
Your marital status
If you’re married, you can investigate how you and your spouse can maximize your Social Security benefits.
Consider your spouse’s health, current work situation and benefits. It might make sense for the lower earner to start taking benefits before the higher earner. Or, if you and your spouse have similar incomes and expect to beat the average life expectancy, maybe you both want to delay your claims. You can also explore spousal benefits to determine if that’s the right route for you.
Your work situation
You can claim Social Security benefits if you’re still working — even if you’re younger than full retirement age. However, your benefit can be temporarily reduced if you earn more than a certain amount. It’s only reduced until full retirement age, though, at which point it’ll account for the benefits that were withheld.
Contact Trust Point For All Your Social Security Needs
It’s often helpful to talk to a professional to help you decide the best time to claim Social Security benefits. Trust Point’s retirement professionals can help you calculate the numbers and guide you in your decision for when to claim Social Security. We also have a free social security calculator tool to estimate your benefit projection from the Social Security Administration. Contact us today to get started.
