Why Do Some People Claim Social Security Early?

You’ve probably heard that claiming your Social Security benefits early will result in permanently lowered benefits – as much as 30 percent, if you claim them at age 62. In many cases this can be a bad idea, because naturally you want to enjoy as much retirement income as possible! But for some people, claiming their benefits early is actually an acceptable idea. Here’s why.

Health concerns. Your Social Security benefits stop when you die, and most of us can’t foresee the future with any certainty. But if you’re in poor health or have been diagnosed with a serious condition, claiming your benefits early can mean that you draw more of them from the system. And it might be a necessity, if you need to stop working.

You want to pay down debts. Your Social Security benefits will climb by about 8 percent for each year that you wait to claim them. But for some people, paying down debts earlier would result in overall savings. If you claim your benefits now, it could help you to start paying off credit cards or other debts, leaving you with more room in your retirement budget later.

You want to switch to part-time work. Some people feel ready to give up their main career in their sixties, but still prefer to work part-time for the extra money or social engagement. Social Security benefits are reduced once you earn more than the annual limit ($18,960 currently). If you earn below that amount, you can draw your Social Security checks while working part time.

Your 35 highest-earning years are behind you. Social Security benefits are calculated based upon your 35 highest-earning years. If you’re earning less now, delaying your claim won’t increase your benefits. You might as well claim them.

You want to pursue a dream in retirement. Maybe you’ve always dreamed of owning your own business, but felt concerned about financial solvency. How will you support yourself until the business begins to turn a profit? Claiming your Social Security benefits now can provide you with a safety net, and allow you to live out a dream in your later years.

If you’re considering when to claim Social Security, don’t make this decision alone. Give us a call, and we can help you analyze each scenario and then determine the best time.