When should you take Social Security?
Edward Jones - Chad Choate, AAMS
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Mar 20, 2024
Florida - Sarasota, Bradenton & Charlotte Counties
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One of your important sources of retirement income will
likely be Social Security — but when should you start taking it?
You can start collecting Social Security benefits at 62,
but your checks will be considerably bigger if you wait until your full
retirement age, which is likely between 66 and 67. You could even wait until
you’re 70, at which point the payments will max out, except for yearly
cost-of-living adjustments. But if you need the money, you need the money, even
if you’re just 62 or any age before full retirement age.
However, if you have adequate
financial resources to meet your monthly needs,
whether through earned income, your investment portfolio or a combination of
the two, you could have some flexibility in choosing when to take Social Security.
In this case, you may want to weigh these considerations:
• Life expectancy – For all of us, it’s one of
life’s great mysteries: How long will we live? Of course, we can’t see
into the future, so the question can’t be answered with total confidence. But to
make an informed decision on when to take Social Security, you don’t need to
know your exact lifespan — you just need to make a reasonably good estimate.
So, for example, if you’re approaching 62, you’re enjoying excellent health and
you have a family history of longevity, you might conclude it’s worth waiting a few years to collect Social Security, so
you can receive the bigger payments.
Conversely, if your health is questionable and your family has not been
fortunate in terms of longevity, you might want to start taking your benefits
earlier.
• Employment – You can certainly continue working
and still receive Social Security benefits. However, if you’re under your full
retirement age for the entire year, Social Security will deduct $1 from your
benefits for every $2 you earn above the annual limit of $22,320. In the year
you reach your full retirement age, Social Security will deduct $1 in benefits
for every $3 you earn above $59,520. So, you may want to keep these reductions in
mind when deciding when to begin accepting benefits. Once you reach your full
retirement age, you can earn any amount without losing benefits. (Also, at your
full retirement age, Social Security will recalculate your benefit amount to
credit you for the months you received reduced benefits because of your excess
earnings.)
• Spouse – Spouses can receive two types of Social
Security benefits: spousal and survivor. With a spousal benefit, your spouse
can receive up to 50% of your full retirement benefits, regardless of when you
start taking them. (Your spouse’s benefit can be reduced by the amount of their
own retirement benefit and whether they took Social Security before their full retirement
age.) But with a survivor benefit, your decision about when to take Social
Security can make a big difference. A surviving spouse can receive the larger
of their own benefit or 100% of a deceased spouse’s benefit, so if you take
benefits early and receive a permanent reduction, your spouse’s survivor
benefit may also be reduced for their lifetime.
When to take Social Security is an important — and
irrevocable — decision. So, consider all the factors before making your choice.
Chad Choate III, AAMS
828 3rd Avenue West
Bradenton, FL 34205
941-462-2445
[email protected]
This article was written by Edward Jones
for use by your local Edward Jones Financial Advisor.
Edward Jones, Member SIPC
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