In short – it depends. Like many topics in personal finance, when to take Social Security is kind of a loaded question for advisers. Taking Social Security is a personal decision based upon a variety of factors. That’s why your adviser should be honest and tell you that it depends; because it depends on a host of social and financial factors.
For starters, it’s not just about your age and turning 62 for early eligibility or older for your Full Retirement Age (FRA). Your FRA is different depending upon your year of birth. You also need to consider whether you need the money. Another factor is family longevity. Do people in your family live longer than average? Are you in good health or are you in great health for your age? Do you fear you won’t be able to draw your “fair share”? Will taking it help you sleep better at night?
On the financial side, you need to consider if you should delay taking Social Security until you are older to increase your payment. Generally, you get about an 8% raise per year that you delay taking Social Security beyond your FRA. This can really maximize your lifetime amount if you are prone to living to an advanced age. You also need to consider if it will be too much income and how it may be taxed if you are still working, or if you have other income. Your adviser can run the scenarios for you so you can get a good idea of what to expect.
These factors put the personal in personal finance. No one should give you an instant answer without probing deeper into your personal situation to help determine the best course of action for you – personally. As an independent Certified Financial Planner™, I can help you with figuring out a course of action and putting that plan into action to get ready for retirement. #talktometuesday #CFPPro #Hireaplanner #retirement #socialsecurity #goals #savings #cash