When to begin taking social security payments

nm

Assuming the person is no longer working, a frank assessment of health and life expectancy is in order upon early eligibility. The other factor to consider is that the higher the base amount, the more raw dollars will be available on the boost, so the A/B analysis must be done to determine the payback period if the person waits and probably should be done year-by-year until 70, actually, particularly if the 401k can support that.

Also, the possibility/probability of work (and limitations involved if taking benefits prior to full retirement age or even age 70) after early eligibility is yet another factor to consider.

For most folks who will not work on SS retirement, the payback period is somewhere between 78 and 82, IIRC, so if that is unlikely due to chronic health conditions, the earlier is likely the better. But a full analysis, rather than a snap decision is ALWAYS worth it for something so significant and relatively irrevocable is involved (which this certainly is).

Yep I have known a few people wait till full age only to die less than five years after drawing. I plan on taking mine as soon as possible as odds are I won’t make it to 80 anyway.

Are you married? if so, another thing to consider is your spouse. My wife is 3 years younger than me and here are some rounded but close to real numbers for me. If I would have started receiving Social Security at 66 years of age I would have gotten $30,000 plus per year. By waiting until 70 years of age I was able to receive $40,000 plus per year. She will probably outlive me so she will collect the higher amount for more than my lifetime. Also, even though cost of living increases are small, 1 or 2% of $40,000 is still more than 1 or 2% of $30,000.

As others have said – the two keys for me are how long do you think you will live and do you need the money?

Depends on your longevity.

If you are likely to live to 85 or more, it might be worth waiting until 67 or even 70.

If you are not working at 62, apply.

You end up with the same amount of money either way for the
Most part.

I'm not counting on it as my retirement so I'm taking it at 62. My family tree says I have between 80 and 87. Fingers crossed

Seems like an over simplification to consider it an 8% return. Don't you sacrifice the "principal" in order to get that return. Seems to me like you'd generally be better off taking the early payments and and investing them. Maybe I'm missing something though.
Haven't thought much about SS still in early 40s but need to get smarter to advise parents if/when they ask.

quote:

---

You have to consider your spouse.

---

This should be looked at IMO. Its a BS loophole that should be fixed. My father in law is married to a woman 15+ years younger, so he is delaying so she gets the higher SS longer. IMO, that's not the spirit of the rules. I understand it isn't a perfect system and also my FIL paid in plenty to afford him that luxury, but people like him don't need SS they are simply working the system.

The other reason I personally wouldn't delay, is 8 years could be multiple administrations. Between death and SS potentially being changed, I don't see the reason to wait. If you can live without it, like I said put it all into an investment account and hold off using it.

What's not discussed though, is that you are taxed on it if you take it and just invest it.

quote:

---

Are you married? if so, another thing to consider is your spouse. My wife is 3 years younger than me and here are some rounded but close to real numbers for me. If I would have started receiving Social Security at 66 years of age I would have gotten $30,000 plus per year. By waiting until 70 years of age I was able to receive $40,000 plus per year. She will probably outlive me so she will collect the higher amount for more than my lifetime.

Also, even though cost of living increases are small, 1 or 2% of $40,000 is still more than 1 or 2% of $30,000.

---

This is similar to our situation. Essentially we are betting that at least one of us will live into our 80's. Based on family history I expect my wife to live into her 90's, but no one knows of course. If one of us had a serious medical issue, such as cancer, we would have taken SS sooner. Everybody's situation is different.

As far as taking at 62 and investing; there are limitations on how much you can make pre full retirement age without it affecting you SS payment. So if you are still working you are probably not able to actually collect the SS. It effectively gets deferred. That restriction goes away at full retirement age.

It depends on how the investment or business is structured and your legal relationship to it. But generally speaking, no.

quote:

---

The Social Security income limit applies to gross wages and net earnings from self-employment. Most other income is exempt, including pensions, interest, annuities, IRA distributions and capital gains.

---