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When Should You Start Taking Social Security Benefits?

March 13, 2020

When is best for you to take social security? Well, I can tell you that answer differs for everyone that comes into our office.

There’s no one right answer for everyone, because everyone’s needs and lives are different. We all know that if you start benefits early (at 62) your benefits are reduced, and you can see on the screen here that benefits can be reduced by as much as 20% if you start benefits at 62.

We should all know that every year you defer and delay your Social Security benefits that benefit grows by about 8% – guaranteed and compounded – until you take your benefits in your mid-60s, late 60s, or 70s – a guaranteed 8% compounded return, nowhere, really. So you know that’s something we should take advantage of if it’s appropriate and right for you to defer and delay your Social Security.

A lot of Americans take their Social Security between 65 and 69. You can see here if you were born from 1943 to 1954, you’re a full retirement age benefit for Social Security’s 66. If you were born in 1955, your full retirement age benefit for Social Security is 66 and two months, and every year after that the Social Security Administration added two months to your full retirement age such that if you were born in 1960 or after your full retirement age is 67.

Only 3% of Americans wait till age 70 to take their Social Security benefits. That’s because most people pass away before they’ve realized all that reward by waiting. In other words, if you wait till 70 you better live a long time. For men, you better live into your late 80s. For women, you better live to about 90 and beyond to make it worth waiting and taking benefits at 70.

So the sweet spot that we see a lot of the time is 65 to 69. There are a lot of things you want to take into consideration when to take Social Security: like your current health. If you’re not in great health, perhaps now is the best time. If you’re in really good health and you’re working, perhaps you defer and delay.

Perhaps you take a spousal benefit and let the other benefit grow. There are all kinds of strategies.

If you have any questions about when is best for you to take Social Security and you want to run that by us, we can throw all that information into our social planning software to help you better decide when it’s best for you to take Social Security.

Just call us, email us, visit our website, or send us a note, and we’d be happy to create for you a Social Security action plan.