When to start taking your social security benefits

[admin]

We hear a lot of debate about when to start taking social security benefits - as soon as you can (62), or wait longer and get more money for the rest of your life. Conventional wisdom is predominately in favor of the former. What do you think? For more on this, see the Tips and Picks article at Surprising Answer

[readytoplay]

This is the first I have heard about any expert that advocates waiting. Since I early retired I am more than looking forward to a steady check at 62, and I can stop the drain on my savings. If you take 5 years worth of distributions and map out how long it will take to make up for that, plus the cost of money, it seems like a big gamble to wait. Me, i'll take the money and run.

[admin]

Dear readers,

I hope you have seen the additional reasons to be cautious about taking early distributions, particularly if you earn more than the allowed amount in the years when you are 62-67. This is now explored a little more fully in a revision to the "Tips and Picks" article on this site - "A Surprising Answer".

"This does not mention the offset in social security monthly benefits if an individual earns more than the allowed amount if they have started their Social Security payments prior to their Full Retirement Age (FRA).

As highlighted in the following Social Security Web page "$1 in benefits will be deducted for each $2 you earn above the annual limit. For 2007 that limit is $12,960 and for 2006, that limit is $12,480." That is a BIG bite and you experience the reduction of benefits, also."[/url]

[ctyankee]

Jonathan changed my mind. I think i will wait before starting to collect.

[Boomer1]

Here is a link to another reference that makes a good case for taking Social Security benefits at maximum age - in some cases. See the July 5 blog entry on this site as well.
Bankrate.com article on when to start drawing SS benefits

[6string]

My father retired at age 59.5 and lived to collect about 10 months worth of SS. That was at age 63 when he died of a heart attack and he was otherwise healthy. I plan to retire at age 59.5, and collect SS at 62... hopefully longer than he did... I was thinking I would try and go 25 years or so!

I understand to each his own... but earlier is better when ya die young!

[retirementguy]

Me, I'm a gambler. My parents are still alive and they say the greatest predictor of longevity is the age of your parents when they die. So i am going to claim at the maximum age. And if I guess wrong, i won't care, anyway.

[philsaun]

When I retired at age 60 I needed to determine when to start receiving my Social Security benefits. I decided to do a calculation to determine if there is any advantage to waiting to normal retirement age (66) or later to age 70. I assembled my results into a document: SocialSecurityPayments.pdf which made my decision straightforward. Note that this result is only relevant to someone who does not need the SS payments to meet ongoing living expenses. Check it out and perhaps it will help you as well.
Any feedback or comments will be appreciated. Phil

[Boomer1]

i read with some interest this week that apparently the SS Admin will let you repay the money you received from an early distribution (e.g.; at age 62). Once you do that you can be eligible to receive the higher benefit that comes if you wait to either normal full-retirement (65 and a few months for me), or 70 years of age for the highest benefit.

Seems like an interesting option for those who retire early and start collecting, then decide to go back to work.

I have only heard of this option one time and am not sure that the source is completely reliable. The reference indicated this is the form to be used - http://www.socialsecurity.gov/online/ssa-521.pdf

My advice would be to be very cautious on this issue. Certainly you would want to consult with an attorney or professional financial expert - you wouldnt want to pay it back and then not be eligible again!
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[Richard]

I think I will also take the cheque at 62.

[topretirementseditor]

There is a great new resource at the Social Security Office - Podcasts on when to start taking your SS benefits. I listened to the first one and it is very well done (only criticism, it's a huge file (5+megabytes) so don't try to download on dial up connection. Worth listening to
http://www.socialsecurity.gov/podcasts/

[bamcote]

As a former claims rep for Social Security, we were always surprised at how many people wait too long to even come in or call to discuss this question.

Each individual should talk with Social Security two to three months before their 62nd birthday to get all the facts and figures and discuss their options. I found overall that the majority should have taken their benefits earlier than later and found a lot of individuals had lost valuable benefits. As with anything, the changing economy has forced a lot of people to continue working and the amount of your earnings in the calendar year does effect whether you would be eligible to draw some benefits in the year. Even one or two checks per year is found money on top of your wages. Could come in handy to pay some of the winter fuel bills or property taxes while you are still working.

[topretirementseditor]

Our good friend Richard sent us this very informative update on the subject of buying back social security payments to receive higher future benefit:

"There is a buyback element available with Social Security which complicates matters even further.

Go to http://www.forbes.com/2008/02/07/retirement-roth-taxes-pf-guru-in_jn_0207retirement_inl.html
for a discussion of this little-known aspect of social security and retirement.

Or just Google Social Security BuyBack.

Essentially, if you start at age X, but then pay back all SS has given you at age X + Y, your payments will immediately rise as if you had never taken out any social security. The complexities: taxes, investments with that money, offsets because of earnings...... Go to above link."

[newskycars]

When my father take the retirement then from that situation i analyze some essential points which i think is better for the retirement benefits like Married women should take Social Security benefits early and Married men and single women should take Social Security benefits late. More than 50% of all men and women start taking benefits at 62. By age 66, well over 90% of all men and women are taking benefits. Since only 3.3% of all men start taking benefits at 66 or later, we have to conclude that men are doing the wrong thing and women (as always) are doing the right thing.