South_agency | E+ | Getty Images
Be aware of when you should opt in
Many people falsely believe that you must start taking Social Security benefits as soon as you retire, but this isn’t the case at all.
Technically, you can start receiving Social Security as early as age 62, despite the currently designated full retirement age of 67.
If you are ill and are uncertain that you’ll live to the break-even age of 80-81, opting into benefits earlier could be a good choice for you.
Starting your benefits at age 62 could also be a helpful option if you really need the cash and don’t have enough saved to support you until full retirement age. However, it might behoove you to wait. Here’s why:
Be aware that your benefit will be permanently reduced if you start claiming Social Security before your full retirement age (66-67), so if you’re able to hold off until then, it’ll be better for you in the long term. If it’s possible to wait even longer, your benefit will continue to increase until age 70, which is really enticing for those in a place to postpone. Every year you wait from 67 to 70, your benefit grows by 8%.
Another reason for waiting to take your benefits is that it may be hard to get the same level of return in the stock market every year.
In fact, if you wait to start collecting Social Security at 70 and live past 80-81 years old, you will actually receive more cash from your Social Security benefits than if you had started taking your benefits at full retirement age.
Your break-even age is determined by what age you begin accepting benefits and how many Social Security checks you receive in your lifetime. If you opt-in early, you may receive more checks over your lifetime, but each check will be less than if you wait until age 70 to start taking benefits. If you wait to age 70, the cash amount will be higher and ultimately you’ll earn more money in a shorter period of time.
Usually by age 81, you will have received more money from Social Security in your lifetime than you…
Read the full article here