When should you start taking Social Security benefits? This is a question that has received a lot
of attention (and caused a lot of confusion over the years!). Get ten experts in a room, and they
would probably remain in there until the end of time without agreeing. What we do know is that
there is a wrong time to start taking Social Security benefits.
Let’s not forget, the size of your monthly checks will depend somewhat on when you claim
Social Security. If you’re sitting in a world of confusion right now, allow us to lift some of the
fog and explain why certain ages are considered the ‘wrong time’ to start claiming. Lifetime Income
Claiming Early
As soon as the federal government decided that people didn’t need to wait until full retirement
age to start claiming Social Security, they needed to eliminate any unfair advantage that came
from the additional payments. As a result, a formula was devised by the Social Security
Administration, and those who claimed early had their checks reduced. With this new formula,
the idea is that everybody receives roughly the same amount from the program, but some people
split this money over a more extended period of time.
When the formula was first introduced, 65 was the full retirement age and, for every month
early, and the SSA took 0.55% off benefits. For anybody claiming three years early at 62,
monthly payments tended to reach 80% of what they would have been if they had waited. At this
stage, everybody was happy enough because it was a universal rule. After a quick calculation, it
was easy to see how much one would receive after retiring at a certain age.
However, everything soon changed. The retirement age increased to 67, and the formula for
early claims was adjusted. After the first three years, benefits are now cut by around 0.42%
(compared to 0.55% in the first three years).
Discouraging Claims at 63/64
Suddenly, making Social Security claims between 63 and 64 made no fiscal sense. With the new
system, it’s important to consider your options thoroughly and how the situation changes from
one year to the next. If your full retirement age is 67, there’s likely to be a huge difference in
what you receive from 62 to 63 and then to 64.
Our Advice: Be Willing to Wait
From our experience, there’s actually a good understanding of Social Security claiming among
federal workers. For the most part, we know that there’s a trade-off to claiming early. If you look
at the statistics, you’ll see a good number of people claiming at 62 and then a dip for those at 63
and 64. While some wait until 65, others wait until they reach the full retirement age. After
speaking with many federal workers, there’s a general consensus that the appropriate age for
retirement is 65 regardless of the changes made in recent years.
In the time ahead, we’re sure there will be lots of views and opinions on the right time to claim
Social Security – and we may even contribute to this debate. However, one thing is for sure,
judging the worst time to claim is much easier. If you can avoid claiming at 63 and 64, we highly
recommend doing it. As for when you should claim, it all comes down to personal circumstances
and your own financial background.
Contact Information:
Email: meree.marsonia@bytestechnolab.com
Phone: 9765478988
Bio:
afdsfasfd sfa sad fsdf
Disclosure:
4556