When should I collect my Social Security benefits?

Social Security Income (SSI) is a government program that provides monthly benefits to retired individuals as well as to certain individuals with disabilities. Designed to aid in financial support during retirement or when facing significant health challenges, understanding when to claim these benefits can significantly affect your financial situation.

You can begin collecting Social Security benefits as early as age 62 and delay collecting it until age 70. The longer you wait, the higher the benefits will be. The full retirement age (FRA), which varies based on your birth year, ranges from 66 to 67 years. Waiting until reaching FRA allows you to receive your complete benefit amount. In other words, you receive a 100% of what you are eligible for. Starting benefits at age 62 may reduce your benefits by approx 30% of what you are eligible for at FRA and waiting until 70 may increase your benefits that exceed benefits at FRA by approx. 30%. Typically, there is an 8% increase in delayed benefits each year starting at your FRA age until your age 70. After age 70, benefits do not increase.

The calculation that goes into determining your social security amount is complex and takes into consideration your work history, past earnings, and how much you paid into the social security system while you were employed. Regardless, when deciding the ideal age to collect Social Security income, consider several factors:

• Financial Needs: If you need income to cover living expenses, claiming early might be necessary for you.

• Health Status: If you have health concerns that may limit your life expectancy, claiming earlier may provide you with crucial funds sooner.

• Work Situation: If you plan to continue working past age 62, delaying benefits can lead to larger payments later. Earning above a certain threshold while collecting early could reduce your benefits.

• Longevity in Family: Consider the lifespan of your family members, as this might help predict how long you could rely on these benefits.

• Spousal Benefits: If both you and your spouse are eligible for social security benefits, consider comparing your benefit, based on your own social security record, to the benefits you may be eligible for under your spouse's record (Spousal benefit) as your spousal benefit may be higher.

There are other personal situations that may arise that can also impact the decision of when to collect social security, such as collecting as a Widow(er) or if taking care of dependant children while retired or disabled. The decision is personal and varies greatly based on individual circumstances. For some, collecting at age 62 may work fine. For others, waiting until their full retirement age ( 66 or 67), age 70 or sometime in between may work better.

Determining the right age to collect Social Security income is not a one-size-fits-all scenario. By carefully assessing your financial needs, health, and lifestyle choices, you can make a well-informed decision that aligns with your retirement goals. Remember, consulting with a financial advisor could also provide valuable insights tailored to your specific situation.