When to Begin Taking Social Security Benefits

For many people, social security plays a big part in their retirement. But it is important to know when to begin taking social security benefits. In this article, we will go over the basics of how beginning your social security works.

Full Retirement Age

Full retirement age is the year you can receive your full social security benefits. Taking it before or after can raise or lower this amount. Your full retirement age is based on your year of birth. For example, if you were born in 1960 your full retirement age is 67. Benefits are reduced by five-ninths of a percent for every month earlier than your full retirement age that you begin taking your benefits. You can begin taking these benefits as early as age 62. However, if you delay your benefits past full retirement age you will receive an increase for each month of delay, up to age 70.

Strategies

There are several factors to take into consideration before beginning to take your social security benefits. First, you need to take into account your cash needs. If you have a large amount of assets that you can draw from, you may benefit from having the flexibility of delaying receiving your payments. However, if you do not have a large nest egg you may need to take your benefits sooner than later. Second, you should factor in life expectancy. If you expect to live a long time you may want to wait to receive the larger benefit over your lifetime.

Working and Social Security Benefits

If you are planning on working and receiving social security benefits, you will want to consider potential ramifications. If you work and take your benefits before full retirement age, $1 of benefits will be deducted for every $2 you earn over the annual limit of $21,240. In the year during which you will reach full retirement age, your benefits will be deducted $1 for every $3 you make over $56,520. Finally, in the month you reach full retirement age, your benefits will no longer be reduced.

Perfecting When to Begin Taking Social Security Benefits

The information in this article will help you perfect when to begin taking social security benefits. You can also meet with a Certified Financial Planner who can help you calculate when the best time to take your benefits will be.

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