So I scoured sources such as Money, Forbes, and the Social Security Administration, to get the scoop on all the factors that impact your decision to take, or defer, your SS benefit.
Basically, you can get lower monthly payments for a longer period of time or higher monthly payments over a shorter period of time.
For an easy example, sites use a monthly benefit of $1000 at the full retirement age of 66/67:
- If you choose to start getting benefits at age 62, your monthly benefit will be reduced by 25% to $750 to account for the longer period of time you receive benefits
- If you choose to begin taking benefits at the mandatory enrollment age, you will get $1000/mo
- If you choose to wait until age 70, you would increase your monthly benefit amount by 31% to $1,320 because you get delayed retirement credits for the postponement
Spousal benefits give married working couples extra flexibility:
- each can receive benefits based on their own earnings history, or
- a lower earning spouse can choose to base a benefit on the higher earning spouse’s income (spousal benefits are 50 percent of your spouse’s benefit)
- you also can choose to collect a spousal benefit initially and delay taking your own benefit, allowing your benefit amount to increase. Then you can claim your benefit when you turn 70 (nifty!)
- just like individual retirement above, if you claim a spousal benefit before full retirement age, it will be reduced
- If the higher earning spouse is older (or has more health concerns that could affect longevity), it may make sense to delay taking Social Security as long as possible up to age 70; when the spouse with the higher benefit dies, the surviving spouse will collect the higher benefit that was earned by the deceased spouse.
And remember, your benefits may be subject to tax, depending on how much you claim in income/dividends, etc. Check with your accountant.
Bottom line: If you plan to continue working, and/or don't need your SS benefits right away, or your spouse makes considerably more than you do, hold off on getting them as long as you can so your monthly amount can be greater. But, if you really need it, don't hesitate to start getting it.
You have been officially alerted.