When Should You Take Social Security?


Know the facts—and your options—before you decide.

by Steve Cyr

Steve Cyr

When should you start Social Security benefits? There is no “one-size-fits-all” solution. It depends on many variables in your personal and family situation. The Social Security Administration has a wealth of information, including setting up an online account to see your personalized estimate.

Determine Your Eligibility

For years, full retirement age for full Social Security benefits was defined as age 65. However, as Americans continued to live longer, Congress changed the rules to slow the depletion of the Social Security Trust Fund. The changes gradually increased the age to 67 for people born after 1959.

You don’t have to wait until your full retirement age to start receiving Social Security. You can start as early as age 62, or as late as age 70. However, the earlier you start receiving it, the lower your monthly benefit will be. Though benefits are reduced by only a fraction of a percent for every month before your full retirement age, it adds up, and can reduce your monthly benefit by as much as 26 percent. One question to ask yourself is: are you more comfortable getting less money every month for a longer period of time or more money every month for a shorter period of time?

Make an Educated Guess at Life Expectancy

No one wants to think about his or her mortality, but retirement planning requires that you ask yourself some tough questions. We can’t know with certainty how long we will live. We can only rely on historical family data, health history and lifestyle choices to make our best guess.

According to the Social Security Administration, a 65-year-old can expect to live to his or her mid 80s. One of four people who are alive today at age 65 will live past age 90, and one of ten will live past age 95. Happily, your golden years may last longer than you think, but the reality is you’ll need to pay for them.

Dream Big, or Not So Big

For many years, the conventional wisdom was that people needed only about 70 percent of their pre-retirement income in retirement. However, a recent research study in The Wall Street Journal suggests that is not enough for most people today. Obviously, a life of travel and dining out will cost more than going to the office every day, so it’s important to be realistic and plan accordingly if your retirement lifestyle will be more glamorous than your current one.

If you want to keep working full-time or part-time, your benefits may be temporarily reduced if you earn more than the stated earnings limit, which is $17,640 for 2019. This reduction only applies until you reach full retirement age.

Make a Plan

It’s important to remember that your estimated Social Security benefits are just that—an estimate. Social Security is one important component to financing your retirement, but it is not the entire picture. To get a feel for how much you’ll need to fund your retirement, take a look at our online retirement calculators, and then contact a knowledgeable financial advisor to put a plan in place that will work for you.

Steve Cyr is a financial advisor with First Command Financial Services. Steve is graduate of the United States Military Academy at West Point with a Bachelor of Science degree with a concentration on Economics and served eight years in the U.S. Army.

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