When to take Social Security benefits

Terry Savage, Tribune Content Agency on

Once upon a time — our parents’ time — Social Security was automatic: You reached age 65 and started collecting your monthly check. Today, dealing with Social Security involves making important decisions that will impact your income for the rest of your life.

The most important choice you will make is when to take Social Security. If you have worked the requisite number of quarters (40) and paid into the system, you are eligible to start taking early Social Security benefits at age 62. Let me say at the start: This is the absolute worst and most costly choice you can make, unless you are suffering from a terminal illness.

Nonetheless, 57 percent of today’s Social Security recipients chose to start their benefits early — before the gradually increasing full retirement age (FRA), currently between 66 and 67 years, depending on your birth year.

There are three big reasons to wait until your full retirement age:

—Taking a Social Security check early costs you roughly 8% a year in benefits for every year you start before FRA — far more than you can earn in a bank today. (And waiting past FRA to age 70, will increase your benefits by roughly 8% for every year you delay.)

—Taking your benefits early permanently reduces your income base, upon which future percentage cost-of-living increases are based. And, for most people, Social Security is the only inflation-adjusted income you will have in retirement.


—Taking Social Security early will penalize your earnings if you continue to work. For 2021, your Social Security check will be reduced by $1 for every $2 you earn above $18,960. If you will each full retirement age this year, the reduction is $1 from your benefits for each $3 you earn above $50,520 until the month you reach full retirement age.

No Excuses

So why do people continue to take benefits early? Mostly they justify it for all the wrong reasons.

Some people figure they won’t live long enough to get the higher benefits promised if they wait. But longevity is increasing. If you are a 65-year-old woman today, the actuarial tables say you are likely to live another 21 years. Men have a slightly lower life expectancy.


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