Understand your options before taking Social Security
For many of us, when to start taking our social security retirement benefits is one of the most important financial decisions we must make. And yet too many people do so without considering all the factors that might help them maximize their benefits. When acting with little to no relevant information, many later come to regret their decision.
You can start by checking your check your social security statement (available here). You will see a range of projected monthly benefits depending on your age when benefits start. Notice that if you elect to start taking your benefit early, your monthly benefit is reduced for each month prior to your full retirement age that the benefits are started. (You can also delay taking your benefit past your full retirement age up to age 70 1/2, and in that case your monthly benefit will increase.)
We are often advised by well-meaning family or friends, “You might as well take social security as soon as you can get it.” But if you do that, your monthly benefit will be reduced by 30% for the rest of your life. Friends and family do not know how much money you will need in retirement – only you do. So, it is a good idea to start analyzing your options well before you are faced with this decision, which, once made, usually cannot be reversed.
If you are married, you and your spouse should consider coordinating when you each will start taking your retirement benefit. If you are divorced, you should analyze and understand your options, too.
Contact us to learn more, including to receive a personalized analysis of your various Social Security scenarios.