April Topic of the Month: Social Security: Should You Take Sooner or Later?

Kevin Orsinger |

Social security is often a confusing system. While you may know what it is, you might be like many people who struggle to decide when the best time to start taking social security is. The answer is extremely contingent on your individual circumstances, and the decision is best made in conversation with your financial advisor.

You are eligible to begin taking social security at the age of 62, though this can be taken earlier if you are the survivor of someone taking Social Security or are on disability. You can wait until you have reached what is known as “full” or “normal” retirement age, which is the time you are eligible to begin receiving full benefits (either 65 or 67 depending on your birth year), or you can wait until age 70.

Essentially, if you begin taking social security before you reach full retirement age, your benefit will be permanently reduced by varying amounts for the duration of time during which you are taking social security.

While this might sound like you should always wait until you reach full retirement age, or later, to begin taking benefits, there are situations in which you, in conversation with your financial advisor, should consider taking benefits early. If you are in poor health, for instance, you might take your benefits early, or if you need money now and anticipate you will have lower expenses in the future. There are other situations in which taking your social security early may be beneficial as well.

On the flip side, your benefit will increase by 8% each year you wait to begin collecting benefits after full retirement age up until you reach 70. Depending on your financial situation and needs, delaying your payments might benefit you as well, though if you are interested in investing, you could possibly earn more by taking these payments. However, this option is not without risks, and should be made with your financial advisor.

There are benefits and drawbacks to taking payments early as well as delaying your payments, and it is best to make this decision with the help of your financial advisor. We hope you will call Orsinger Investment Group, Inc. at (724)588-9067 to discuss how you make your social security work best for you.