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Choosing When to Receive Social Security

Starting Social Security retirement benefits at the optimal age can mean receiving a substantially greater overall payout.  If you have a short life expectancy and no other resources, taking early reduced benefits may be the best option. If you have a longer life expectancy, and other assets that can be used for income, delaying can mean significantly greater income over the lifespan.

You can start receiving a reduced benefit at age 62. The benefits may be reduced as much as 30%. Those benefits will not convert to a full benefit at Normal Retirement Age (NRA).

Full benefits start at NRA and depends on year of birth. You can start receiving full retirement benefits sometime between ages 65 – 67.  For people born 1960 or later, NRA is age 67.  There is a chart and calculator on the Social Security Administration web site https://www.ssa.gov/oact/progdata/nra.html

You can delay benefits until age 70 and the benefit amount will increase 5.5% – 8.0% per year (exact amount depends on year of birth). This increased rate of return on Social Security benefits may be greater than what you can expect from other investment assets.  Find out more about delayed retirement credit on the Social Security web site https://www.ssa.gov/planners/retire/delayret.html

A financial planner can provide a Social Security Optimization calculation. The optimization will provide an estimation of total expected Social Security payout as it relates to starting date and life expectancy. An optimization, along with a look at available assets & needs, can help you make an informed decision about when to start Social Security retirement benefits.