At what age should you begin taking Social Security benefits? You can start as early as age 62 or as late as age 70. Or you can begin taking benefits at your “normal retirement age” (NRA), which depends on the year you were born. Before you decide, you’ll want to consider several things.
»Your Full Retirement Age
The age at which you can receive your full Social Security benefit is 65 for individuals born in 1937 or earlier and rises incrementally to 67 (for individuals born in 1960 or later). If you begin taking benefits at your NRA, you’ll receive the full amount, even if you have other income.
»Smaller Checks, More Years
If you begin taking benefits at age 62, your payments will be smaller than they would be at normal retirement age, but you might receive them for a longer time. When you choose this option, your monthly benefit amount will always be less than the full amount.
»Bigger Checks, Fewer Years
You can hold off taking Social Security benefits and receive higher monthly payments for each year beyond your NRA that you wait to collect, up to age 70. This may be a good choice if you have other income sources and won’t need the money for a while.
»To Help You Decide
Your personal situation can help you decide when to take benefits. Consider the following:
• Your health. If your health is poor, you may want to take benefits early.
• Are you still working? Your benefits will be temporarily reduced once your income exceeds a certain amount.
• Do you have other income? Consider waiting if you won’t need your benefit money to live on right away.
• Is your family long-lived? You may need the extra income later on, so waiting may be the best choice.
»The “Break-even” Point
Your total lifetime benefits will probably be about the same no matter which option you choose. However, if you are considering taking benefits earlier or later than your NRA, you should figure your “break-even” point — the age after which your total lifetime benefits would be either less or more than they would have been if you had taken them at normal retirement age. Visit www.ssa.gov to do the calculations.
First Command Financial Services, Inc.