If you’re nearing retirement you’ve undoubtedly heard the point of view that it’s best to wait to take advantage of social security. When to take this income is obviously a major decision in retirement planning. There is an eight-year window in which to start taking the benefit, from 62 to 70. If you take it early, you’re going to get a significantly lower amount than if you wait until you’re 66 or 67 or, better yet, until you’re 70!
It’s true, you get more if you wait. In fact, if I had waited until I was 66, I would have gotten roughly $400 more a month, or nearly $5,000 a year more than I get today.
Waiting to reap this benefit makes sense! But not for everyone.
It seems logical to wait, but it’s not that simple. When our economy went to hell with the sub-prime mortgage debacle and the subsequent market nosedive, lots of people saw their retirement savings evaporate. This was particularly difficult for people near or at retirement age. Taking social security early was a must for those who needed the money – though receiving a smaller amount than originally projected – to pay bills and get by.
I was fortunate to have sold a significant amount of stock to buy a house just two months before this crash in the financial market. That money in stocks would have entirely evaporated if I hadn’t needed a home. I was also fortunate to not desperately need the social security income to survive and pay bills.
Why then did I start taking social security at age sixty-two?
There were three main reasons I took social security early:
- The main reason I started early was because I had had breast cancer at age 44 and had undergone extensive treatment for this disease, a disease of which I have since been cured. If there was a chance I wouldn’t have a long life after this major disease, I wanted to retire sooner rather than later.
- The second reason for taking social security early was my family history. While my mother didn’t pass until she was 76, both my father and my sister died very young, 59 and 60, respectively. Sure, I could live to be 90, but I didn’t feel the genetics were on my side.
- Finally, I saw too many of my co-workers in law enforcement retire fairly young – in their 50’s – after 30+ year careers and then die just a few short years after retiring. Yes, there are lots who have long retirements and for those who didn’t, their history had nothing to do with me directly, but I didn’t want to risk less time in retirement due to illness or an early death.
I felt so strongly about these reasons that I retired at age 58 (after having worked 40 years in my life) and lived on my savings and a small pension for four years before applying for social security at age 62.
Today, at age 70, and after enjoying 12 years of retirement, I have never regretted my decision. I hope I DO live to be 90. If a little less money during the rest of my years means looking for less expensive retirement activities, so be it! I am SO grateful to have the financial support I do have, and I love my simple life!
These are my very personal reasons for taking funds early. Your reasons for when to do so will depend on your circumstances.
If you can wait to dial into social security, great!
If you need – for whatever reason – to take it sooner rather than later, I think that’s ok … and entirely a personal decision only you need to justify to yourself! Do the math, but be sure to consider what you feel will work best for your situation, and don’t let the plans (and opinions!) of others factor into what will give you the most money for your needs and the greatest peace of mind!